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Preventing competition because of “solidarity”: Rhetoric and reality of airport investments in Spain

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Author Info

  • Germà Bel

    (University of Barcelona)

  • Xavier Fageda

    (University of Barcelona)

Abstract

Spain is the only large European country in which airport management is strictly centralized and publicly owned. This peculiar institutional setting prevents competition among Spanish airports, and policy makers and bureaucrats in charge of the system regularly justify it on grounds of interterritorial solidarity. This paper tests whether allocation of investments in airports is effectively based on redistributive purposes, as claimed and looks at other factors to explain such allocation. Our empirical analysis suggests that neither a progressive redistribution target nor the scale economies criterion explain allocation decisions. Instead, we find that political factors have significant influence on the allocation decisions made by the government.

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File URL: http://128.118.178.162/eps/pe/papers/0511/0511012.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Public Economics with number 0511012.

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Length: 25 pages
Date of creation: 16 Nov 2005
Date of revision:
Handle: RePEc:wpa:wuwppe:0511012

Note: Type of Document - pdf; pages: 25
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Web page: http://128.118.178.162

Related research

Keywords: Public Enterprise; Legal monopolies; Air Transportation; Models with Panel Data;

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References

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  1. Germà Bel & Xavier Fageda, 2005. "Getting there fast: Globalization, intercontinental flights and location of headquarters," Urban/Regional 0511008, EconWPA.
  2. Andrew Worthington & Brian Dollery, 1998. "The political determination of intergovernmental grants in Australia," Public Choice, Springer, vol. 94(3), pages 299-315, March.
  3. Johansson, Eva, 2003. "Intergovernmental grants as a tactical instrument: empirical evidence from Swedish municipalities," Journal of Public Economics, Elsevier, vol. 87(5-6), pages 883-915, May.
  4. Duffy-Deno, Kevin T. & Eberts, Randall W., 1991. "Public infrastructure and regional economic development: A simultaneous equations approach," Journal of Urban Economics, Elsevier, vol. 30(3), pages 329-343, November.
  5. Costa-I-Font, Joan & Rodriguez-Oreggia, Eduardo & Lunapla, Dario, 2003. " Political Competition and Pork-Barrel Politics in the Allocation of Public Investment in Mexico," Public Choice, Springer, vol. 116(1-2), pages 185-204, July.
  6. Cadot, Olivier & Röller, Lars-Hendrik & Stephan, Andreas, 1999. "A Political Economy Model of Infrastructure Allocation: An Empirical Assessment," CEPR Discussion Papers 2336, C.E.P.R. Discussion Papers.
  7. Behrman, Jere R & Craig, Steven G, 1987. "The Distribution of Public Services: An Exploration of Local Governmental Preferences," American Economic Review, American Economic Association, vol. 77(1), pages 37-49, March.
  8. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 177-200, March.
  9. Anne Case, 1997. "Election Goals and Income Redistribution: Recent Evidence From Albania," Working Papers 227, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
  10. Bhargava, A & Franzini, L & Narendranathan, W, 1982. "Serial Correlation and the Fixed Effects Model," Review of Economic Studies, Wiley Blackwell, vol. 49(4), pages 533-49, October.
  11. Holtz-Eakin, Douglas, 1994. "Public-Sector Capital and the Productivity Puzzle," The Review of Economics and Statistics, MIT Press, vol. 76(1), pages 12-21, February.
  12. Norihiko Yamano & Toru Ohkawara, 2000. "The Regional Allocation of Public Investment: Efficiency or Equity?," Journal of Regional Science, Wiley Blackwell, vol. 40(2), pages 205-229.
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Citations

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Cited by:
  1. Germá Bel & Xavier Fageda, 2011. "La reforma del modelo de gestión de aeropuertos en España: ¿Gestión conjunta o individual?," Hacienda Pública Española, IEF, vol. 196(1), pages 109-130, january.
  2. 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.
  3. Andreas Kappeler & Albert Solé-Ollé & Andreas Stephan & Timo Välilä, 2012. "Does Fiscal Decentralisation Foster Regional Investment in Productive Infrastructure?," Discussion Papers of DIW Berlin 1204, DIW Berlin, German Institute for Economic Research.
  4. Germá Bel & Xavier Fageda, 2009. "Factors Explaining Charges in European Airports: Competition, Market Size, Private Ownership and Regulation," Working Papers 2009-31, FEDEA.

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