Public Expenditure Competition in the Transport Sector: Intermodal and Spatial Considerations for Greece

Abstract

The development of transport networks requires public investments, in terms of government expenditure, on several types of (road, rail, port, airport, and urban public transport) infrastructure, including their operational and maintenance services. This paper develops and implements a system-wide spatioeconomic model to analyze the expenditure competition among different types of investment in the Greek transport sector. The suggested approach can offer valuable insight into the economies of scale and synergies associated with a particular transport investment. It is also extended to consider how such investment determinants as population concentration, economic growth, and political considerations at the prefecture level affect expenditure allocation to different types of transport infrastructure. The results indicate the statistical significance of scale effects of transport investment, substitution effects of road investment on other types of transport investment, and political factors on different types of transport investment. Airport investment relates to the most significant synergistic effects on expenditures in other types of public transport facilities. Thus, policy makers must take these fiscal externalities into account for the strategic planning and evaluation of infrastructure supply, and coordinate or subsidize public transport projects with significant positive externalities.