The Myth of Unbundling the Railways in the Czech Republic

Competitiveness and Competition in Railway Transportation - Economic and Regional Aspects of Regulation, Brno: FEA MU, 2009

12 Pages Posted: 31 Oct 2010 Last revised: 26 Mar 2011

See all articles by Tomáš Otáhal

Tomáš Otáhal

Mendel University - Faculty of Economics and Business Administration

Tomáš Pospíšil

affiliation not provided to SSRN

Multiple version iconThere are 2 versions of this paper

Date Written: September 15, 2009

Abstract

Does unbundling ensure efficient railway transportation? The separation of railway operators and infrastructure is supposed to ensure efficient railway transportation. However, the experience with the unbundling of the railway operation in the Czech Republic suggests that unbundling does not work. In this paper, we investigate the hypothesis that the Czech railways represent an example of a network industry which is more efficient when it is concentrated. Therefore, the unbundling of railways in the Czech Republic favors particular political interests instead of efficient operation. Our hypothesis is supported by the growth of per unit costs that indicates the inefficient operation of unbundled Czech railways. We also looked at the volume of subsidies and the productivity of labor which indicate the particular interests of politicians and the management of the Czech railways.

Keywords: The European Union Transport Policy, The Czech Republic, interest groups, soft budged constraint, railways unbundling

JEL Classification: D23, H25, L22, L92

Suggested Citation

Otáhal, Tomáš and Pospíšil, Tomáš, The Myth of Unbundling the Railways in the Czech Republic (September 15, 2009). Competitiveness and Competition in Railway Transportation - Economic and Regional Aspects of Regulation, Brno: FEA MU, 2009, Available at SSRN: https://ssrn.com/abstract=1699856 or http://dx.doi.org/10.2139/ssrn.1699856

Tomáš Otáhal (Contact Author)

Mendel University - Faculty of Economics and Business Administration ( email )

Staňkova 578/16b
Brno, 602 00
Czech Republic

Tomáš Pospíšil

affiliation not provided to SSRN ( email )

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