The Myth of Unbundling the Railways in the Czech Republic

17 Pages Posted: 31 Jan 2014

See all articles by Tomáš Otáhal

Tomáš Otáhal

Mendel University - Faculty of Economics and Business Administration

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Date Written: June 17, 2012

Abstract

Did the unbundling the railways in the Czech Republic 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 less costly when it is concentrated. Furthermore, we argue that this is caused by inefficient regulation. Therefore, the unbundling of the 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, regulation

JEL Classification: D23, H25, L22, L92

Suggested Citation

Otáhal, Tomáš, The Myth of Unbundling the Railways in the Czech Republic (June 17, 2012). Available at SSRN: https://ssrn.com/abstract=2387667 or http://dx.doi.org/10.2139/ssrn.2387667

Tomáš Otáhal (Contact Author)

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

Staňkova 578/16b
Brno, 602 00
Czech Republic

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