Financing Infrastructure Investment and Socio-Economie Development

There is over the last few years a clear trend in Europe to privatise traditional govemmental tasks, also because of new EU legislation. Many of these tasks have traditionally been carried out by the govemment itself, largely because of the ‘natura1 monopoly’ argument. Examples of current and future privatisation polities are the telecommunication and energy sector. For transport infrastructure (in this paper limited to roads and railways) however, the picture is less unambiguous, as in the past decade the govemments have even tended to increase their influence, e.g., by formally taking over the financing of infrastructure. In this paper it is analyzed in how far the traditional arguments for govemment intervention are stil1 valid. First, the strategie importante of transport infrastructure is investigated by analyzing the resulting economie impacts at several spatial levels. Next, we investigate how this affects the financing and operation of transport infrastructure as a traditional govemment task, by applying inter alia the so-called Pentagon model and by employing the well-known Coase-theorem. In this context, the traditional arguments for govemment intervention and possibilities for private operation and financing of transport infrastructure are reviewed. It is concluded that the traditional arguments for government intervention have become less valid and that privatising transport infrastructure may improve the competitive position of countries or regions.