ECONOMIC-EFFICIENCY OF RAILWAYS AND IMPLICATIONS FOR PUBLIC-POLICY - A COMPARATIVE-STUDY OF THE OECD COUNTRIES RAILWAYS

This paper attempts to identify the effects of government intervention and subsidisation on the productive efficiency of those railways whic h derive a high proportion of their business from passenger services. In particular, the productive efficiency of the railway systems in 19 OECD countries is measured and analysed in order to identify the effec ts of both public subsidies and the degree of managerial autonomy on e fficiency. The empirical results show that: (i) railway systems with h igh dependence on public subsidies are significantly less efficient th an similar railways with less dependence on subsidies; (ii) railways w ith a high degree of managerial autonomy from regulatory authorities t end to achieve higher efficiency.