Although the government continues to subsidize and protect the outdated U.S. Postal Service, Americans' demand for mail delivery is declining and thus the Postal Service has an eroding revenue base. To create a modern, effective postal industry that will not drain government resources, government ownership and monopoly power must end. To address this issue, AEI has established the Postal Reform Initiative, which is running concurrently with President George W. Bush's Commission on the United States Postal Service.

The project is led by AEI adjunct scholar Rick Geddes, an assistant professor in the Department of Policy Analysis and Management at Cornell University and author of Saving the Mail (AEI Press, 2003). Geddes is leading a series of conferences and is the author of AEI's Postal Reform Papers. This project will assess the mission and operations of the Postal Service, propose a vision of a modern postal industry, and suggest how the United States could implement this vision. It will focus on the potential of modern communications technology and a more open and competitive market environment to solve the problems that have bedeviled the U.S. postal industry. It will also review the experiences of other countries that have enacted postal reform in recent years.

In the first Postal Reform Paper, published in March, Geddes wrote, "We are . . . at a decisive moment in U.S. postal history. The model upon which the Postal Service was created, that of an independent, government-owned agency enjoying a legally enforced monopoly, is inappropriate for the United States today. Inexorable, secular technological change cannot be addressed through minor bureaucratic renovations. The reforms recommended by the president's commission must represent a bold departure from the outdated 1970 model."

In Saving the Mail, Geddes showed the feasibility of meaningful postal reform. "The postal services of Germany and Holland are now privately owned. Full market competition has been introduced in Finland, Sweden, and New Zealand. Through limitations on the reserved area of service, increased competition has been introduced in a variety of countries. The citizens of those countries are beginning to enjoy the benefits of vigorous postal reform, and Americans may soon do the same."