RAILWAYS ECONOMIC REGULATION: A WORLDWIDE SURVEY

In the second half of the 19th century, excluding India among the main countries, railways were privately built, owned and operated, sometimes with large government investments. The rapid expansion of car use after WWII, together with growing inefficiencies in the public rail sector, led to traffic decline and financial difficulties for many railway companies. In order to face this situation, various liberalisation reforms have been introduced which have increased the level of private sector involvement, strengthening the need of sound economic regulation. Starting from a survey involving 20 countries, the paper reviews the existing railways regulatory models worldwide. The main characteristics of each regulatory system have been collected and analysed in order to provide an overview of the current practices, both in quantitative and qualitative terms. Results show how public subjects still play a dominant role as infrastructure managers and frequently also as service providers in vertically integrated structures. Economic regulation is rarely applied and the role of the regulatory institutions seems quite limited. Finally, where applied, full privatization and deregulation led in some countries to significant efficiency improvements, traffic increase and fiscal savings. Our survey evidences how a solution that could fit all the contexts is not possible, but rather each country should develop its own framework, learning also from the analysis of the best practices worldwide.