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Political economics or Keynesian demand-side policies: What determines transport infrastructure investment in Swedish municipalities?

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  • Jussila Hammes, Johanna

Abstract

This paper examines investment in transport infrastructure in Swedish municipalities according to the three National Transport Infrastructure Plans of 2004, 2010 and 2014. The plans cover 12 years each. The test of a swing voter model, combined with variables relevant to the Keynesian model of demand side policies, supports the proposition that there is less investment in municipalities with highly partisan electorates. The model seems to work better for road than for rail investments. Municipalities with a high density of voters at the ideological cut-point (middle of the ideological distribution) got more investment in the 2010 plan but not in the other plans. The impact of the elasticity of output on public service provision raised investment in road projects in sub-plan period 1 compared to later sub-plan periods. The tax elasticity of output may influence the volume of investment downward. The Plan for 2010–2021 seems to be the most politically determined of the plans considered here.

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  • Jussila Hammes, Johanna, 2015. "Political economics or Keynesian demand-side policies: What determines transport infrastructure investment in Swedish municipalities?," Research in Transportation Economics, Elsevier, vol. 51(C), pages 49-60.
    • Handle: RePEc:eee:retrec:v:51:y:2015:i:c:p:49-60
    DOI: 10.1016/j.retrec.2015.07.007
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    Cited by:

    1. Qiu, Guo & Xu, Wangtu (Ato) & Li, Ling, 2018. "Key factors to annual investment in public transportation sector: The case of China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 107(C), pages 1-19.
    2. Bondemark, Anders & Sundbergh, Pia & Tornberg, Patrik & Brundell-Freij, Karin, 2020. "Do impact assessments influence transport plans? The case of Sweden," Transportation Research Part A: Policy and Practice, Elsevier, vol. 134(C), pages 52-64.
    3. Jussila Hammes , Johanna & Mandell , Svante, 2016. "Districts’ co-financing of the central government," Working papers in Transport Economics 2016:12, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    4. Jussila Hammes, Johanna & Nilsson, Jan-Eric, 2016. "The allocation of transport infrastructure in Swedish municipalities: Welfare maximization, political economy or both?," Economics of Transportation, Elsevier, vol. 7, pages 53-64.

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    More about this item

    Keywords

    Demand side policy; Investment; Keynes; Political economy; Transport infrastructure; Sweden; Swing-voter model;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning

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