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Preventing competition because of 'solidarity': rhetoric and reality of airport investments in Spain

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  • Germa Bel
  • Xavier Fageda

Abstract

From a public interest perspective, there could be a justification for constraining market mechanisms with the aim of progressive redistribution. However, some policies might be based on selfish motivations of government agents. In this article, we empirically contrast if the infrastructure policy is based only on public interest motivations or if it is also based on the private motivations of policy makers. In this way, Spain infrastructure policy provides a useful policymaking field to test hypothesis about the behaviour of policy makers. We find some evidence regarding the strength of political motivations in explaining such behaviour. In fact, results from our analysis show that political motivations can eventually play a more relevant role than social welfare maximization.

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  • Germa Bel & Xavier Fageda, 2009. "Preventing competition because of 'solidarity': rhetoric and reality of airport investments in Spain," Applied Economics, Taylor & Francis Journals, vol. 41(22), pages 2853-2865.
    • Handle: RePEc:taf:applec:v:41:y:2009:i:22:p:2853-2865
    DOI: 10.1080/00036840701522846
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    Cited by:

    1. Kappeler, Andreas & Solé-Ollé, Albert & Stephan, Andreas & Välilä, Timo, 2013. "Does fiscal decentralization foster regional investment in productive infrastructure?," European Journal of Political Economy, Elsevier, vol. 31(C), pages 15-25.
    2. Roy Bahl & Richard M. Bird, 2014. "Decentralization and Infrastructure: Principles and Practice," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1408, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    3. Albalate, Daniel & Bel, Germà & Fageda, Xavier, 2015. "When supply travels far beyond demand: Causes of oversupply in Spain's transport infrastructure," Transport Policy, Elsevier, vol. 41(C), pages 80-89.
    4. Germá Bel & Xavier Fageda, 2009. "Factors Explaining Charges in European Airports: Competition, Market Size, Private Ownership and Regulation," Working Papers 2009-31, FEDEA.
    5. Bilotkach, Volodymyr, 2018. "Political economy of infrastructure investment: Evidence from the economic stimulus airport grants," Economics of Transportation, Elsevier, vol. 13(C), pages 27-35.
    6. Daniel Albalate & Germà Bel & Xavier Fageda, 2010. "Is it Redistribution or Centralization? On the Determinants of Government Investment in Infrastructure," Working Papers XREAP2010-15, Xarxa de Referència en Economia Aplicada (XREAP), revised Dec 2010.
    7. Castillo-Manzano, José I. & López-Valpuesta, Lourdes & González-Laxe, Fernando, 2011. "The effects of the LCC boom on the urban tourism fabric: The viewpoint of tourism managers," Tourism Management, Elsevier, vol. 32(5), pages 1085-1095.
    8. Núñez-Sánchez, Ramón, 2015. "Regional public support to airlines and airports: An unsolved puzzle," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 76(C), pages 93-107.
    9. Germá Bel & Xavier Fageda, 2011. "La reforma del modelo de gestión de aeropuertos en España: ¿Gestión conjunta o individual?," Hacienda Pública Española / Review of Public Economics, IEF, vol. 196(1), pages 109-130, january.
    10. JOSÉ I. Castillo-Manzano & Xavier Fageda, 2014. "How are Investments Allocated in a Publicly Owned Port System? Political Factors versus Economic Criteria," Regional Studies, Taylor & Francis Journals, vol. 48(7), pages 1279-1294, July.
    11. Daniel Albalate & Germà Bel & Xavier Fageda, 2013. "“When supply travels far beyond demand: Institutional and regulatory causes of oversupply in Spain’s transport infrastructure”," IREA Working Papers 201312, University of Barcelona, Research Institute of Applied Economics, revised Jun 2013.
    12. Ballart, Xavier & Güell, Casilda, 2015. "Airport ownership and regulation in Spain: Explaining the resistance to change," Journal of Air Transport Management, Elsevier, vol. 47(C), pages 112-118.
    13. Kappeler, Andreas & Solé-Ollé, Albert & Stephan, Andreas & Välilä, Timo, 2013. "Does fiscal decentralization foster regional investment in productive infrastructure?," European Journal of Political Economy, Elsevier, vol. 31(C), pages 15-25.

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    JEL classification:

    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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