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Do the selected Trans European transport investments pass the cost benefit test?

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  • Stef Proost
  • Fay Dunkerley
  • Saskia Loo
  • Nicole Adler
  • Johannes Bröcker
  • Artem Korzhenevych

Abstract

This paper assesses the economic justification for the selection of priority projects defined under the auspices of the Trans-European transport network. Three different transport models are used to analyse the costs and benefits associated with the current list of 30 priority projects. Most of these projects fail the cost-benefit test and few of the economically justifiable projects would need European subsidies to ensure their viability. Two remedies are proposed to minimise the inefficiencies surrounding project selection. The first remedy would oblige each member state or group of states to perform a cost-benefit analysis, followed by peer review and ensure that the results were published publicly prior to the ranking of federally funded priority projects. The second remedy would require federal funding to be made available only for projects with important spillovers to other countries in order to avoid pork barrel political behaviour. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Stef Proost & Fay Dunkerley & Saskia Loo & Nicole Adler & Johannes Bröcker & Artem Korzhenevych, 2014. "Do the selected Trans European transport investments pass the cost benefit test?," Transportation, Springer, vol. 41(1), pages 107-132, January.
    • Handle: RePEc:kap:transp:v:41:y:2014:i:1:p:107-132
    DOI: 10.1007/s11116-013-9488-z
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    2. Hans R A Koster & Takatoshi Tabuchi & Jacques-François Thisse, 2022. "To be connected or not to be connected? The role of long-haul economies [Do rural roads create pathways out of poverty? Evidence from India]," Journal of Economic Geography, Oxford University Press, vol. 22(4), pages 711-753.
    3. Wenjie Wu & Yutian Liang & Di Wu, 2016. "Evaluating the Impact of China’s Rail Network Expansions on Local Accessibility: A Market Potential Approach," Sustainability, MDPI, vol. 8(6), pages 1-11, May.
    4. Castillo-Manzano, José I. & Pedregal, Diego J. & Pozo-Barajas, Rafael, 2016. "An econometric evaluation of the management of large-scale transport infrastructure in Spain during the great recession: Lessons for infrastructure bubbles," Economic Modelling, Elsevier, vol. 53(C), pages 302-313.
    5. Massiani, Jérôme & Maltese, Ila, 2022. "Thirty years of socio-economic evaluation of the Lyon–Turin High–Speed rail project," Research in Transportation Economics, Elsevier, vol. 94(C).
    6. Stef Proost & Jacques-François Thisse, 2019. "What Can Be Learned from Spatial Economics?," Journal of Economic Literature, American Economic Association, vol. 57(3), pages 575-643, September.
    7. Catalão, Francisco Pinheiro & Cruz, Carlos Oliveira & Sarmento, Joaquim Miranda, 2019. "The determinants of cost deviations and overruns in transport projects, an endogenous models approach," Transport Policy, Elsevier, vol. 74(C), pages 224-238.
    8. Wubeshet Woldemariam, 2021. "Prioritization of Low-Volume Road Projects Considering Project Cost and Network Accessibility: An Incremental Benefit–Cost Analysis Framework," Sustainability, MDPI, vol. 13(23), pages 1-15, December.
    9. Mononen, Petri & Leviäkangas, Pekka & Haapasalo, Harri, 2017. "From internal efficiency to societal benefits – Multi modal transport safety agency's socio-economic impact analysis," Research in Transportation Economics, Elsevier, vol. 66(C), pages 78-90.
    10. Jan Anne Annema, 2013. "The use of CBA in decision-making on mega-projects: empirical evidence," Chapters, in: Hugo Priemus & Bert van Wee (ed.), International Handbook on Mega-Projects, chapter 13, pages 291-312, Edward Elgar Publishing.
    11. Bruno Borger & Stef Proost, 2016. "The political economy of pricing and capacity decisions for congestible local public goods in a federal state," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 23(5), pages 934-959, October.
    12. Euijune Kim & Seung‐Woon Moon & Yoojin Yi, 2021. "Analyzing spillover effects of development of Asian highway on regional growth of Northeast Asian countries," Review of Development Economics, Wiley Blackwell, vol. 25(3), pages 1243-1266, August.
    13. DE BORGER, Bruno & PROOST, Stef, 2015. "Tax and regulatory policies for European transport - getting there, but in the slow lane," Working Papers 2015009, University of Antwerp, Faculty of Business and Economics.
    14. Yunqiang Xue & Hongzhi Guan & Jonathan Corey & Heng Wei & Hai Yan, 2017. "Quantifying a Financially Sustainable Strategy of Public Transport: Private Capital Investment Considering Passenger Value," Sustainability, MDPI, vol. 9(2), pages 1-20, February.
    15. Thomopoulos, Nikolaos & Grant-Muller, Susan, 2013. "Incorporating equity as part of the wider impacts in transport infrastructure assessment: an application of the SUMINI approach," LSE Research Online Documents on Economics 60073, London School of Economics and Political Science, LSE Library.
    16. Jerome Massiani, 2022. "Lost in taxation," Working Papers 501, University of Milano-Bicocca, Department of Economics.

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    More about this item

    Keywords

    Transport infrastructure; Cost benefit analysis; Europe;
    All these keywords.

    JEL classification:

    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures

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