Do the Selected Trans European Transport Investments Pass the Cost Benefit Test?

22 Pages Posted: 12 Feb 2010

See all articles by Stef Proost

Stef Proost

KU Leuven - Department of Economics

Fay Dunkerley

KU Leuven - Department of Economics

Saskia Van Der Loo

Katholieke Universiteit Leuven. KUL. Faculty of Business and Economics

Nicole Adler

Hebrew University of Jerusalem

Johannes Broecker

affiliation not provided to SSRN

Artem Korzhenevych

Kiel Institute for the World Economy; University of Kiel

Date Written: January 1, 2010

Abstract

This paper assesses the economic justification for the selection of priority projects defined under the auspices of the Trans-European transport network. In analyzing the current list of 30 priority projects, we apply three different transport models to undertake a cost-benefit comparison. We find that many projects do not pass the cost-benefit test and only a few of the economically justifiable projects would need European subsidies to make them happen. Two remedies are proposed to minimize the inefficiencies in future project selection. The first remedy obliges each member state or group of states to perform a cost-benefit analysis (followed by a peer review) and to make the results public prior to ranking priority projects. The second remedy would require federal funding to be available only for projects with important spillovers to other countries, in order to avoid pork barrel behaviour.

Keywords: transport infrastructure, cost benefit analysis, Europe Union

JEL Classification: R42, H11, H54

Suggested Citation

Proost, Stef V. and Dunkerley, Fay and Van Der Loo, Saskia and Adler, Nicole and Broecker, Johannes and Korzhenevych, Artem, Do the Selected Trans European Transport Investments Pass the Cost Benefit Test? (January 1, 2010). Available at SSRN: https://ssrn.com/abstract=1545730 or http://dx.doi.org/10.2139/ssrn.1545730

Stef V. Proost (Contact Author)

KU Leuven - Department of Economics ( email )

Leuven, B-3000
Belgium
016 32 66 35 (Phone)
016 32 67 96 (Fax)

Fay Dunkerley

KU Leuven - Department of Economics ( email )

Leuven, B-3000
Belgium

Saskia Van Der Loo

Katholieke Universiteit Leuven. KUL. Faculty of Business and Economics ( email )

Naamsestraat 69
Leuven, B-3000
Belgium

Nicole Adler

Hebrew University of Jerusalem ( email )

Mount Scopus
Jerusalem, Jerusalem 91905
Israel

Johannes Broecker

affiliation not provided to SSRN ( email )

Artem Korzhenevych

Kiel Institute for the World Economy ( email )

P.O. Box 4309
Kiel, Schleswig-Hosltein D-24100
Germany

University of Kiel ( email )

Olshausenstr. 40
D-24118 Kiel, Schleswig-Holstein 24118
Germany

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
144
Abstract Views
2,148
rank
245,004
PlumX Metrics