The Governance of Complex Systems: The Case of British Railways

The aim of this paper is to add new elements for a better comprehension of the governance problems that can rise from the privatisation of a complex system, like the railway network, using a methodology that shows the connections and the influence of the various technical, economic and political factors at work within large technical systems. The case-study of the British Railways has been used as a “paradigm” to show all the difficulties and the risks involved in a complex transition. The paper shows that the social costs of the privatisation of British Rail have been very high because the governance of the transition did not fit with the economic, technical and organisational structure of the network. The analysis, dividing this question in the two aspects of finance and regulation, points up the necessity of innovative governance schemes, to cooperate with the increased complexity of markets and firms. United Kingdom has been one the first European countries to liberalise the railways, and the problems run into the British experience can be a useful guide for other reforming systems, like the Italian one.