Street food is varied and cheap. At its best it is interesting and experimental. The trucks can quickly respond to consumer preferences and park where demand is highest. The communal nature of food-truck dining helps build social capital. Eating is about more than just sustenance. But Melbourne is missing this revolution. Our food trucks are few; street stalls non-existent. Melbourne's street food is rubbish because Melbourne's brick-and-mortar restaurants prefer it that way. Businesses don't like competition. Competition pushes down prices and forces innovation. Entrepreneurs are always trying to entice customers away.

And like any other industry, restaurants know the surest way to reduce competition is to have the government regulate your competitors. Every day, the City of Melbourne hosts about 800,000 people. Yet for those 800,000 people, the city council has approved space for just nine food trucks. Also, these food trucks have to stay at specific locations. Not one of these locations is in the city centre itself, where you would think demand for food is highest. All but two are hidden in the parklands around the Royal Botanic Gardens. So, perhaps the council is being ironic when it says food trucks ''are an important part of city life''. They are not even allowed in the city proper. Even more brazenly, the council claims its food-truck policy is all about ''responding to market demand''. It is a market the council is deliberately suppressing. Still, at least the council pretends it is concerned about what consumers want. The neighbouring City of Yarra does not even bother with such niceties. Yarra's mobile food vehicle guidelines state the council's first priority is to support existing traders in commercial premises. By ''support'', it means ''protect from competition''. Yarra includes some of the best shopping and cultural precincts in Australia. But until last year, food trucks were banned entirely.

Now food trucks are legal - with a permit, of course - but only if they stay at least 100 metres away from any existing takeaway business. Yarra Council can insist the trucks only operate when other restaurants are closed. It can even decide what sort of food is offered for sale. These restrictions are nothing more than naked, anti-competitive protectionism. They reduce consumer choice. And they stifle Melbourne's culinary identity. Seemingly minor rules and regulations can shape a city's culture in unexpected ways. Much of what we imagine to be distinctive about global cities is the result of obscure local laws rather than any inherent national character. For instance, Amsterdam's narrow buildings look that way simply because a tax in the 17th century was levied on the width of buildings. New York's Times Square is dominated by advertising billboards not because Yankee capitalism is out of control but because the zoning code requires office towers in the square to display illuminated signs. In Australia, the most obvious example of how regulations transform culture is liquor licensing.

Melbourne and Sydney offer a natural experiment. The people are the same; the laws are different. Until recently, Sydney had extremely expensive liquor licences. High-priced licences encourage beer barns - licensees need the patronage to recoup the high costs. Melbourne's much cheaper licences have allowed smaller, more distinctive venues to flourish. The laneway bars that feature in Melbourne's tourism campaigns only exist because of our distinctive liquor regulations. In 2008, the NSW government began to offer small-bar licences. But policymakers can't decide whether to oppose more drinking venues (more places to get drunk) or support them (nicer places to socialise). As a result, Sydney's small-bar revolution has been less than revolutionary. In the same way, local councils love the cool vibe of food trucks but they also want to protect restaurants from competition. So they play both sides. The councils brag about their embryonic food-truck culture, while making it as hard as possible for the trucks to actually operate. This political compromise works well for established restaurants and local government politicians. But it works terribly for us.

Chris Berg is a research fellow with the Institute of Public Affairs. Twitter: @chrisberg