This is a study of how transportation policy can be fashioned to improve Iowa's long-term economic prospects. The research focuses on the state level and covers pricing, resource allocation, investment, and other issues that directly affect the performance of public facilities that support transportation of goods and people to and from points in Iowa. Chapter 1 is an introduction. Chapter 2 begins with an assessment of how Iowa's economy is changing, both functionally and spatially. Commuting patterns and methods of goods movement are then discussed. The purpose of this analysis is to provide a context for the exploration of transportation policy issues in subsequent chapters. In Chapter 3 a framework is established for evaluating changes in transportation policies. A working definition of economic development is given and the role of government policies in making an area more attractive to economic activity is considered. Chapter 4 analyzes public policy options for Iowa's roads and highways. These policy options are intended to help the state compete for economic activity. Chapter 5 assesses alternative investment strategies for major navigational facilities on the upper Mississippi River. Chapter 6 examines major transportation policy issues in Iowa's agricultural sector. The current magnitude of agricultural shipments and the roles of several modes are presented. After focusing on issues related to railroad competitiveness, the analysis turns to how Iowa's rural roads should be financed. The need for joint investment and pricing decisions affecting waterways, railroads, and rural roads is stressed. Chapter 7 examines the current status of freight transportation in Iowa. An assessment is made of issues related to trucking and of intermodal transportation and its potential for cost-effective shipping to and from businesses in Iowa. Chapter 8 summarizes the key findings of this study, offering ten recommendations. These recommendations relate to transportation as a means of facilitating economic development