Public funding in the Italian transport sector. A roadmap for policymakers

Public money flowing in or out of the transport sector is one of the most powerful drivers of its evolution. but what happens to that money? the paper analyses the amounts involved and the impact of the cash flows on the patronage and behaviour of firms. the aim of the analysis is to provide a comprehensive picture of the revenue and expenditure of the Italian transport system for the Italian state and the local administrations and how that money is used. based on the available resources, the paper quantifies the subsidies and the spending on contractual transfers to support transportation investments, network maintenance, and service delivery, as well as estimating the value of the principle taxes generated by the transport sector and illustrating the historical background. the results of the analysis indicate that road transport generates more in taxes than it receives in the form of free public roads (a net of over thirty-two billion euros per year). In contrast, the public bus and rail transport system receives subsidies valued at approximately thirteen billion euros per year, inclusive of new infrastructure. the other methods of transport benefit from relatively lower resources, with air industry close to even. the paper discusses the tools available for a more informed assessment of this expenditure, in particular, from the socio-economic perspective, through a cost benefit analysis (cbA), outlines possible alternative scenarios of public expenditure and the effects on patronage, and presents the authors’ conclusions and policy indications