Unbundling political and economic rationality: A non-parametric approach tested on transport infrastructure in Spain

Abstract

This paper suggests a simple quantitative method to assess the extent to which public investment decisions are dominated by political or economic motivations. The true motivation can be identified by modeling each policy goal as the focus of the optimization anchoring a data envelopment analysis of the efficiency of the observed implementation. In other words, we rank performance based on how far observed behavior is from the optimal behavior under each possible goal, and the goal for which the distance is smaller reveals the specific motivation of investment or any policy decision for that matter. The approach is tested on Spain's land transport infrastructure policy since it is argued by many observers to be driven more by political than economic concerns, resulting in a mismatch between capacity investment and traffic demand. The method clearly shows that investments have generally been more consistent with a political objective (the centralization of economic power) than with an economic objective (maximizing mobility).