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The allocation of transport infrastructure in Swedish municipalities: Welfare maximization, political economy or both?

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  • Jussila Hammes, Johanna
  • Nilsson, Jan-Eric

Abstract

This paper compares models for explaining the volume of transport investments in Swedish municipalities: 1. by the planned projects’ welfare consequences, 2. in terms of the district demand (the common pool) model, namely a municipality's share of the cost towards the investment and 3. electoral concerns and/or lobbying, as described by a swing voter model. We find that the welfare only hypothesis has little explanatory power. The district demand model explains the investment volume in rail projects, while the swing voter model explains road investment better. Lobbying does not seem to have any impact on the investment volume. Finally, we find that including a measure of the welfare in the political economy models greatly enhances the models’ explanatory power. Our main conclusion is that future analyses of what drives the allocation of resources for transport infrastructure should consider aspects related to both political economy, welfare, and the transport mode.

Suggested Citation

  • Jussila Hammes, Johanna & Nilsson, Jan-Eric, 2016. "The allocation of transport infrastructure in Swedish municipalities: Welfare maximization, political economy or both?," Economics of Transportation, Elsevier, vol. 7, pages 53-64.
    • Handle: RePEc:eee:ecotra:v:7-8:y:2016:i::p:53-64
    DOI: 10.1016/j.ecotra.2016.11.002
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    References listed on IDEAS

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    1. Assar Lindbeck & Jörgen Weibull, 1987. "Balanced-budget redistribution as the outcome of political competition," Public Choice, Springer, vol. 52(3), pages 273-297, January.
    2. Johanna Jussila Hammes, 2013. "The Political Economy of Infrastructure Planning in Sweden," Journal of Transport Economics and Policy, University of Bath, vol. 47(3), pages 437-452, September.
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    8. Knight, Brian, 2004. "Parochial interests and the centralized provision of local public goods: evidence from congressional voting on transportation projects," Journal of Public Economics, Elsevier, vol. 88(3-4), pages 845-866, March.
    9. Jussila Hammes, Johanna, 2015. "Political economics or Keynesian demand-side policies: What determines transport infrastructure investment in Swedish municipalities?," Research in Transportation Economics, Elsevier, vol. 51(C), pages 49-60.
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    Cited by:

    1. Pyddoke, Roger, 2023. "Comparison of policies for increasing sustainable transport mode shares in Swedish cities," Working Papers 2023:9, Swedish National Road & Transport Research Institute (VTI).
    2. Halse, Askill Harkjerr & Fridstrøm, Lasse, 2019. "Explaining low economic return on road investments. New evidence from Norway," MPRA Paper 94389, University Library of Munich, Germany.
    3. Jussila Hammes, Johanna & Volden, Gro Holst & Welde, Morten & Börjesson, Maria & Odeck, James, 2021. "Finding transport projects with high value for money : what are the socio-geographic determinants?," Working Papers 2021:4, Swedish National Road & Transport Research Institute (VTI).
    4. Bondemark, Anders & Andersson, Henrik & Brundell-Freij, Karin, 2022. "Public preferences for distribution in the context of transport investments," Transportation Research Part A: Policy and Practice, Elsevier, vol. 157(C), pages 160-184.

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    More about this item

    Keywords

    D61; D72; H41; R42; Distributive politics; Lobbying; Party competition; Political economy; Transport infrastructure; Welfare;
    All these keywords.

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning

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