12 Pages Posted: 13 Jun 2014
Date Written: June 2014
The British rail network was privatised in the mid‐ to late 1990s. However, the sector was heavily regulated and not permitted to evolve according to market processes. Indeed, the government imposed a complex and fragmented structure on the industry which ran counter to traditional railway practices. As a consequence, economies of scale and scope were lost, while transaction costs were increased. There was a negative impact on costs and safety. Given the disappointing outcomes, there is a strong case for reforming the sector by facilitating the development of a privately owned and vertically integrated rail system.
Keywords: British Rail, fragmentation, privatisation, transaction cost economics, vertical integration
JEL Classification: D23, L14, L33, R48
Suggested Citation: Suggested Citation
Wellings, Richard, The Privatisation of the UK Railway Industry: An Experiment in Railway Structure (June 2014). Economic Affairs, Vol. 34, Issue 2, pp. 255-266, 2014. Available at SSRN: https://ssrn.com/abstract=2450316 or http://dx.doi.org/10.1111/ecaf.12083
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