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“When supply travels far beyond demand: Causes of oversupply in Spain’s transport infrastructure”

Author

Listed:
  • Daniel Albalate

    (Faculty of Economics, University of Barcelona)

  • Germà Bel

    (Faculty of Economics, University of Barcelona)

  • Xavier Fageda

    (Faculty of Economics, University of Barcelona)

Abstract

Spain’s transport infrastructure policy has become a paradigmatic case of oversupply and of mismatch with demand. The massive expansion of the country’s transport infrastructure over the last decade has not been a response to demand bottlenecks or previously identified needs. For this reason, the intensity of use today on all interurban modes of transport in Spain falls well below that of other EU countries. This paper analyzes the institutional and regulatory factors that have permitted this policy, allowing us to draw lessons from the Spanish case that should help other countries avoid the pitfalls and shortcomings of Spanish policy. Based on our analysis, we also discuss policy remedies and suggest reforms in different regulatory areas, which could help improve the performance of Spain’s infrastructure policy.

Suggested Citation

  • Daniel Albalate & Germà Bel & Xavier Fageda, 2014. "“When supply travels far beyond demand: Causes of oversupply in Spain’s transport infrastructure”," IREA Working Papers 201409, University of Barcelona, Research Institute of Applied Economics, revised Mar 2014.
    • Handle: RePEc:ira:wpaper:201409
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    References listed on IDEAS

    as
    1. Germà Bel, 2011. "Infrastructure and nation building: The regulation and financing of network transportation infrastructures in Spain (1720--2010)," Business History, Taylor & Francis Journals, vol. 53(5), pages 688-705, August.
    2. 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.
    3. 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.
    4. Castells, Antoni & Sole-Olle, Albert, 2005. "The regional allocation of infrastructure investment: The role of equity, efficiency and political factors," European Economic Review, Elsevier, vol. 49(5), pages 1165-1205, July.
    5. Daniel Albalate & Germà Bel & Xavier Fageda, 2012. "Beyond the efficiency-equity dilemma: Centralization as a determinant of government investment in infrastructure," Papers in Regional Science, Wiley Blackwell, vol. 91(3), pages 599-615, August.
    6. Daniel Albalate & Germà Bel, 2011. "Cuando La Economía No Importa: Auge Y Esplendor De La Alta Velocidad En España," Revista de Economia Aplicada, Universidad de Zaragoza, Departamento de Estructura Economica y Economia Publica, vol. 19(1), pages 171-190, Spring.
    7. 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.
    8. Castillo-Manzano, José I. & López-Valpuesta, Lourdes & Pérez, Javier J., 2008. "Economic analysis of the Spanish port sector reform during the 1990s," Transportation Research Part A: Policy and Practice, Elsevier, vol. 42(8), pages 1056-1063, October.
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    Citations

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    Cited by:

    1. Dorothée Allain-Dupré & Claudia Hulbert & Margaux Vincent, 2017. "Subnational Infrastructure Investment in OECD Countries: Trends and Key Governance Levers," OECD Regional Development Working Papers 2017/05, OECD Publishing.
    2. Albalate, Daniel & Fageda, Xavier, 2016. "High speed rail and tourism: Empirical evidence from Spain," Transportation Research Part A: Policy and Practice, Elsevier, vol. 85(C), pages 174-185.
    3. Diego García-Mejuto, 2022. "Theorizing nation-building through high-speed rail development: Hegemony and space in the Basque Country, Spain," Environment and Planning A, , vol. 54(3), pages 554-571, May.
    4. Daniel, Albalate & Germà, Bel & Albert, Gragera, 2019. "Politics, risk, and white elephants in infrastructure PPPs," Utilities Policy, Elsevier, vol. 58(C), pages 158-165.
    5. Pedro Plasencia-Lozano, 2021. "An Ex Ante Analysis of the Planned Transportation Network in the Region of Extremadura (Spain) by Using Physical Parameters," Sustainability, MDPI, vol. 13(11), pages 1-32, May.
    6. Andrés Rodríguez-Pose & Callum Wilkie, 2018. "Strategies of gain and strategies of waste: What determines the success of development intervention?," Papers in Evolutionary Economic Geography (PEEG) 1826, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jul 2018.
    7. Bel, Germà & Bel-Piñana, Paula & Rosell, Jordi, 2017. "Myopic PPPs: Risk allocation and hidden liabilities for taxpayers and users," Utilities Policy, Elsevier, vol. 48(C), pages 147-156.
    8. Rocha, Bruno T. & Afonso, Nuno & Melo, Patrícia C. & de Abreu e Silva, João, 2022. "What drives the allocation of motorways? Evidence from Portugal's fast-expanding network," Journal of Transport Geography, Elsevier, vol. 102(C).
    9. Baños-Pino, José F. & Boto-García, David & Zapico, Emma, 2022. "Persistence and dynamics in the efficiency of toll motorways: The Spanish case," Economics of Transportation, Elsevier, vol. 31(C).
    10. 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.
    11. Bertoméu-Sánchez, Salvador & Estache, Antonio, 2017. "Unbundling political and economic rationality: A non-parametric approach tested on transport infrastructure in Spain," Transport Policy, Elsevier, vol. 59(C), pages 181-195.
    12. Fageda, Xavier & Gonzalez-Aregall, Marta, 2017. "Do all transport modes impact on industrial employment? Empirical evidence from the Spanish regions," Transport Policy, Elsevier, vol. 55(C), pages 70-78.
    13. Daniel Albalate del sol, 2015. "Evaluating HSR availability on Tourism: Evidence from Spanish Provinces and Cities," ERSA conference papers ersa15p288, European Regional Science Association.
    14. Daniel Albalate & Germà Bel & Albert Gragera, 2018. "“When politics and lobbyism combine to promote white elephants by using PPPs”," IREA Working Papers 201823, University of Barcelona, Research Institute of Applied Economics, revised Oct 2018.
    15. Boto-García, David & Pérez, Levi, 2023. "The effect of high-speed rail connectivity and accessibility on tourism seasonality," Journal of Transport Geography, Elsevier, vol. 107(C).
    16. Beria, Paolo & Grimaldi, Raffaele & Albalate, Daniel & Bel, Germà, 2018. "Delusions of success: Costs and demand of high-speed rail in Italy and Spain," Transport Policy, Elsevier, vol. 68(C), pages 63-79.

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    More about this item

    Keywords

    Infrastructure; Transportation; Overcapacity; Regulation; Spain. JEL classification: H54; L91; L98; R41; R42; R48;
    All these keywords.

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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