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The European Railway Sectors: Understanding and Assessing Change

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Listed:
  • Giovanni ESPOSITO
  • Julia DOLESCHEL
  • Tobias KALOUD
  • Marco MARIOTTI
  • Jadwiga URBAN-KOZŁOWSKA

Abstract

This paper aims at explaining and assessing the process of change that European railway sectors have experienced over the last decades. It has been organized in two parts: the first part (section 2) explains change and the second part (section 3) empirically assesses change. In the first part we argue that the roots of this change process date back to the 1950s when, because of competitiveness reasons, the market share of most European railways began to decrease compared to other transport modes. Since national reformers ascribed these performance shortcomings to the traditional organization of the railway sector which was that of vertically-integrated state- owned monopoly. Therefore, between the 1970s and 1980s many governments in Europe adopted reforms that tried to inject competition in national railway sectors by supporting liberalization policies. Then, since early-1990s the European Commission has released a number of regulatory instruments aimed at pursuing three main goals: 1) liberalization of the rail services; 2) unbundling of infrastructure and service level, and 3) creation of the common transport market. The empirical analysis conducted in the second part of this paper suggests that state-controlled structures still play a crucial role in the management and performance of national railway industries as lower service prices are associated with greater presence of the state in the sector. Results show that liberalization-friendly regulation does not necessarily benefit railway service consumers since increased levels of market access, unbundling and privatization are not necessarily associated with lower prices. Our analysis shows that the long-lasting transition from state-owned monopolies to competitive market arrangements in the railway sectors provided mitigated results. We conclude this paper by launching a reflection on the future developments of railways in Europe.

Suggested Citation

  • Giovanni ESPOSITO & Julia DOLESCHEL & Tobias KALOUD & Marco MARIOTTI & Jadwiga URBAN-KOZŁOWSKA, 2017. "The European Railway Sectors: Understanding and Assessing Change," Departmental Working Papers 2017-01, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
  • Handle: RePEc:mil:wpdepa:2017-01
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Railway sector; Liberalization; ECTR indicator; EU regulation; State-owned enterprise; Paradigm; Reform;
    All these keywords.

    JEL classification:

    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
    • L38 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Policy
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • P11 - Economic Systems - - Capitalist Systems - - - Planning, Coordination, and Reform
    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General

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