The moderating effect of the public finances on transport infrastructures in Spain

• Published date: 01 December 2022
• Author: Agustín Álvarez‐Herránz,M. Gabriela Lagos,Daniel Balsalobre‐Lorente
• Date: 01 December 2022
• DOI: http://doi.org/10.1002/pa.2735

RESEARCH ARTICLE

The moderating effect of the public finances on transport

infrastructures in Spain

Agustín 

Alvarez-Herránz

1

| M. Gabriela Lagos

2

| Daniel Balsalobre-Lorente

3

1

Department of Spanish and International

Economics, Econometrics and Economic

History and Institutions, Faculty of Social

Sciences, University of Castilla La Mancha,

Cuenca, Spain

2

Department of Political Economy and Public

Finance, Economic and Business Statistics and

Economic Policy, Faculty of Economic and

Business Sciences, University of Castilla La

Mancha, Albacete, Spain

3

Department of Political Economy and Public

Finance, Economic and Business Statistics and

Economic Policy, Faculty of Social Sciences,

University of Castilla La Mancha, Cuenca,

Spain

Correspondence

Daniel Balsalobre-Lorente, Department

of Political Economy and Public Finance,

Economic and Business Statistics and

Economic Policy, Faculty of Social Sciences,

University of Castilla La Mancha, Avda. de los

Alfares, 44-16071 Cuenca, Spain.

Email: daniel.balsalobre@uclm.es

Funding information

Interministerial Commission of Science and

Technology (CICYT), Grant/Award Numbers:

TRA2007-63564, TRA2004-04355

In recent decades, Spain has witnessed a considerable increase in railway and road trans-

port infrastructure. The driver of this change has been investme nt from the central gov-

ernment, which has generated speculation regarding the possible distribution of new

infrastructure according to partisan political interests. This paper aims to determine

whether this political influence impacts the efficiency of the transport infrastructure. This

study proposes an empirical model to assess the impact of the central governme nt's

investment in roads and railways in the country's 15 mainland autonomous communities.

The empirical results reveal that the political factor, as a proxy of public finances, moder-

ates the accessibility process. The empirical model analyses the impact of new infrastruc-

ture on structuring and territorial cohesion during 1995–2007, considered the golden

decade in Spain. Based on the econometric results, we conclude that state investment in

rail, moderated by the consideration of political factors, improves the accessibility of rail

transport infrastructure. Finally, this study presents relevant policy implications,

suggesting a new line of regulations to increase local transport infrastructure projects'

quality regarding “network efficiency.”

KEYWORDS

accessibility, efficiency, political factor, territorialized investments, transport infrastructure

1|INTRODUCTION

Traditionally, a classic issue in regional economics is analyzing the impact

of transport infrastructure on territories' economic development. The

linkage between distance and transport costs determines the possibilities

of competing in a market, as economic agents seek to establish them-

selves in places that minimize these costs for them. Consequently, gov-

ernments aim to encourage economic activity in places that will boost

regional development through public transport and communication infra-

structure. These investments account for a large share of the govern-

ment's investment effort and affect the territory as a whole: some

geographic areas bear the opportunity costs of the investments that

improve the situation of others, even efficiency and equity objectives do

notalwayscoincide(Bröckeretal.,2010; Cantos-Cantos et al., 2020;

Monzon et al., 2019; Ortega et al., 2018; Tokunova, 2018). Hence,

investment in areas where there are economies of scale to be exploited

is more efficient than investment in peripheral territories with low levels

of development, which, in turn, would justify the investment in terms of

equity. When several territorial government levels exist, each with lim-

ited resources and decision-making capacity for transport infrastructure

investment projects, the risks include a lack of rationality regarding

investments and their distributive equity, that is, undersupply of infra-

structure in some territories and oversupply in others. In Spain, a strongly

decentralized state, the central government is not exclusively responsible

for investment in transport infrastructure, although it controls public

works of a more general nature and development projects affecting more

than one autonomous community.

1

The most highly developed transport

1

Spain is administratively divided into 17 “autonomous communities”(Andalusia, Aragon,

Asturias, the Balearic Islands, the Canary Islands, Cantabria, Castilla-Le

on, Castilla-La Mancha,

Catalonia, Extremadura, Galicia, La Rioja, Madrid, Murcia, Navarre, the Basque Country, and

Valencia) and 2 “autonomous cities”(Ceuta and Melilla) (Art. 149.1.21 and 24 of the Spanish

Constitution of 1978).

Received: 3 March 2021 Revised: 26 May 2021 Accepted: 24 July 2021

DOI: 10.1002/pa.2735

J Public Affairs. 2022;22(Suppl. 1):e2735. wileyonlinelibrary.com/journal/pa © 2021 John Wiley & Sons Ltd. 1of13

https://doi.org/10.1002/pa.2735