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Preventing Competition because of Solidarity: Rhetoric and Reality of Airport Investments in Spain

25 Pages Posted: 17 Nov 2005  

Germà Bel

University of Barcelona - Department of Political Economics

Xavier Fageda

University of Barcelona - Department of Economic Policy

Date Written: October 2005

Abstract

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.

Keywords: Public Enterprise, Legal monopolies, Air Transportation, Models with Panel Data

JEL Classification: L32, L43, L93, C23

Suggested Citation

Bel, Germà and Fageda, Xavier, Preventing Competition because of Solidarity: Rhetoric and Reality of Airport Investments in Spain (October 2005). Available at SSRN: https://ssrn.com/abstract=849167 or http://dx.doi.org/10.2139/ssrn.849167

Germà Bel (Contact Author)

University of Barcelona - Department of Political Economics ( email )

Av. Diagonal, 690
Barcelona, 08034
Spain

HOME PAGE: http://www.ub.edu/graap/beling.htm

Xavier Fageda

University of Barcelona - Department of Economic Policy ( email )

Av. Diagonal 690
08034 Barcelona
Spain
0034 934021947 (Phone)
0034 934024573 (Fax)

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