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Preventing competition because of “solidarity”: Rhetoric and reality of airport investments in Spain

  • Germà Bel

    (University of Barcelona)

  • Xavier Fageda

    (University of Barcelona)

Spain is the only large European country in which airport management is strictly centralized and publicly owned. This peculiar institutional setting prevents competition among Spanish airports, and policy makers and bureaucrats in charge of the system regularly justify it on grounds of interterritorial solidarity. This paper tests whether allocation of investments in airports is effectively based on redistributive purposes, as claimed and looks at other factors to explain such allocation. Our empirical analysis suggests that neither a progressive redistribution target nor the scale economies criterion explain allocation decisions. Instead, we find that political factors have significant influence on the allocation decisions made by the government.

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File URL: http://128.118.178.162/eps/pe/papers/0511/0511012.pdf
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Paper provided by EconWPA in its series Public Economics with number 0511012.

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Length: 25 pages
Date of creation: 16 Nov 2005
Date of revision:
Handle: RePEc:wpa:wuwppe:0511012
Note: Type of Document - pdf; pages: 25
Contact details of provider: Web page: http://128.118.178.162

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  1. Case, A., 1997. "Election Goals and Income Redistribution: Recent Evidence from Albania," Papers 177, Princeton, Woodrow Wilson School - Development Studies.
  2. Bhargava, A & Franzini, L & Narendranathan, W, 1982. "Serial Correlation and the Fixed Effects Model," Review of Economic Studies, Wiley Blackwell, vol. 49(4), pages 533-49, October.
  3. Germà Bel & Xavier Fageda, 2008. "Getting there fast: globalization, intercontinental flights and location of headquarters," Journal of Economic Geography, Oxford University Press, vol. 8(4), pages 471-495, July.
  4. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 177-200, March.
  5. Holtz-Eakin, Douglas, 1994. "Public-Sector Capital and the Productivity Puzzle," The Review of Economics and Statistics, MIT Press, vol. 76(1), pages 12-21, February.
  6. Norihiko Yamano & Toru Ohkawara, 2000. "The Regional Allocation of Public Investment: Efficiency or Equity?," Journal of Regional Science, Wiley Blackwell, vol. 40(2), pages 205-229.
  7. Kevin T. Duffy-Deno & Randall W. Eberts, 1989. "Public infrastructure and regional economic development: a simultaneous equations approach," Working Paper 8909, Federal Reserve Bank of Cleveland.
  8. Worthington, Andrew C & Dollery, Brian E, 1998. " The Political Determination of Intergovernmental Grants in Australia," Public Choice, Springer, vol. 94(3-4), pages 299-315, March.
  9. Olivier Cadot & Lars-Hendrik Röller & Andreas Stephan, 1999. "A Political Economy Model of Infrastructure Allocation: An Empirical Assessment," CIG Working Papers FS IV 99-15, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
  10. Johansson, Eva, 2003. "Intergovernmental grants as a tactical instrument: empirical evidence from Swedish municipalities," Journal of Public Economics, Elsevier, vol. 87(5-6), pages 883-915, May.
  11. Costa-I-Font, Joan & Rodriguez-Oreggia, Eduardo & Lunapla, Dario, 2003. " Political Competition and Pork-Barrel Politics in the Allocation of Public Investment in Mexico," Public Choice, Springer, vol. 116(1-2), pages 185-204, July.
  12. Behrman, Jere R & Craig, Steven G, 1987. "The Distribution of Public Services: An Exploration of Local Governmental Preferences," American Economic Review, American Economic Association, vol. 77(1), pages 37-49, March.
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