A survey of economists specialising in postal services has found that they recommend that the government-supported United States Postal Service (USPS) be de-monopolised or privatised.
The U.S. government first got involved with the postal services as a way to support the growth of democracy. The more modern defence is cross-subsidisation, where the profits in one region
can offset losses incurred on less populous routes — ensuring universal service to rural areas. Another defence is that there are economies of scale, with lower average costs, due to the size
of the postal service and amount of mail. However, the study concludes that neither of these justifications are valid:
Generally, economists recommend some combination of rapid de-monopolisation and privatisation, though there are some differences of opinion regarding the order in which those reforms should be made.
Source: Rick Geddes, “Do Vital Economists Reach a Policy Conclusion on Postal Reform?” Econ Journal Watch, Volume 1, Number 1, April 2004.
For text
http://www.econjournalwatch.org/pdf/Geddes%20Do%20Economists%20April%202004.pdf
For more on Privatization
http://www.ncpa.org/iss/pri/
FMF Policy Bulletins\18 May 2004
