IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/67830.html
   My bibliography  Save this paper

Assessing the railways subsidy in selected European countries: insights from the Italian case

Author

Listed:
  • Arrigo, Ugo
  • Di Foggia, Giacomo

Abstract

This paper is aimed at analysing state aid to the railway sector in the Western countries of the European Union. Although this is a preliminary exercise, literature lacks of specificity. From the analysis, a highly differentiated situation in Europe emerges: a group of countries with permanently lower subsidies (the Iberians, the Scandinavians and Austria); a group of countries with a medium level of subsidies (all of the major countries: Germany, France and the UK) and a group of countries with permanently high subsidies (Italy, Denmark, Belgium and the Netherlands). This paper demonstrates that railways have so far benefited from weakened forms state aid control. This can be motivated (i) by the need for modal rebalance recognised by national transport policies, (ii) by the natural monopolistic character of the network whose duplication is not economically feasible and (iii) by the non-competitive traditional structure, from a legal point of view, of even the transport service. This situation, however, is set to change drastically with the opening up of services to competition, which has already been done in the European Union for the freight sector and in some countries, although only on a voluntary basis, even for the passenger sector. By focusing on Italy, this study finds that the elevated state aid to the rail sector consequently results in both a major public finance problem and a potential factor of competition distortion.

Suggested Citation

  • Arrigo, Ugo & Di Foggia, Giacomo, 2013. "Assessing the railways subsidy in selected European countries: insights from the Italian case," MPRA Paper 67830, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:67830
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/67830/8/MPRA_paper_67830.pdf
    File Function: original version
    Download Restriction: no

    References listed on IDEAS

    as
    1. Christian Growitsch & Heike Wetzel, 2006. "Economies of Scope in European Railways: An Efficiency Analysis," IWH Discussion Papers 5, Halle Institute for Economic Research.
    2. Antonio Couto & Daniel Graham, 2009. "The determinants of efficiency and productivity in European railways," Applied Economics, Taylor & Francis Journals, vol. 41(22), pages 2827-2851.
    3. Beria, Paolo & Quinet, Emile & de Rus, Gines & Schulz, Carola, 2012. "A comparison of rail liberalisation levels across four European countries," Research in Transportation Economics, Elsevier, vol. 36(1), pages 110-120.
    4. Chris Nash & Jan-Eric Nilsson & Heike Link, 2013. "Comparing Three Models for Introduction of Competition into Railways," Journal of Transport Economics and Policy, University of Bath, vol. 47(2), pages 191-206, May.
    5. Fumitoshi Mizutani & Shuji Uranishi, 2013. "Does vertical separation reduce cost? An empirical analysis of the rail industry in European and East Asian OECD Countries," Journal of Regulatory Economics, Springer, vol. 43(1), pages 31-59, January.
    6. Arrigo, Ugo & Di Foggia, Giacomo, 2013. "Competition And Pricing Of Essential Inputs: The Case Ofaccess Charges For The Use Of The Italian Rail Infrastructure," UTMS Journal of Economics, University of Tourism and Management, Skopje, Macedonia, vol. 4(3), pages 295-308.
    7. Christian Growitsch & Heike Wetzel, 2009. "Testing for Economies of Scope in European Railways: An Efficiency Analysis," Journal of Transport Economics and Policy, University of Bath, vol. 43(1), pages 1-24, January.
    8. Guido Friebel & Marc Ivaldi & Catherine Vibes, 2010. "Railway (De)Regulation: A European Efficiency Comparison," Economica, London School of Economics and Political Science, vol. 77(305), pages 77-91, January.
    9. Andersson, Henrik & Ögren, Mikael, 2007. "Noise charges in railway infrastructure: A pricing schedule based on the marginal cost principle," Transport Policy, Elsevier, vol. 14(3), pages 204-213, May.
    10. Bulcsu Szekely, 2009. "Liberalisation of the railway industry in Europe: toward a sustainable system through process view," International Journal of Sustainable Economy, Inderscience Enterprises Ltd, vol. 1(2), pages 167-185.
    11. Pedro Cantos & José Manuel Pastor & Lorenzo Serrano, 2010. "Vertical and Horizontal Separation in the European Railway Sector and its Effects on Productivity," Journal of Transport Economics and Policy, University of Bath, vol. 44(2), pages 139-160, May.
    12. Jan-Eric Nilsson & Roger Pyddoke & Staffan Hultén & Gunnar Alexandersson, 2013. "The Liberalisation of Railway Passenger Transport in Sweden," Journal of Transport Economics and Policy, University of Bath, vol. 47(2), pages 307-312, May.
    13. Nash, Chris, 2010. "European rail reform and passenger services - the next steps," Research in Transportation Economics, Elsevier, vol. 29(1), pages 204-211.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Railways; State aid; Public finance; Subsidies; Europe; Competition;

    JEL classification:

    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:67830. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter). General contact details of provider: http://edirc.repec.org/data/vfmunde.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.