European railway reforms and efficiency: Review of evidence in the literature

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Abstract

The objective of the European railway reforms which started in the 1990s was to enable the entry of competition to raise the efficiency of railway transport. This was undertaken because the level of services, particularly in former Eastern Bloc countries, was very low due to neglected investment, and so railway transport market share was in decline. The primary goal of this text is to determine based on available empirical studies whether the reforms affected the efficiency of the railway sector positively, and the secondary aim is to identify the factors which complicate evaluation of the reforms’ impact. According to empirical studies, the effect of competition on efficiency is unclear. The reforms have brought the most benefit to consumers, but their overall effect depends on many other factors. Competition for the market appeared to be a better way of implementing competition than competition in the market. In addition, comprehension of the problems complicating the analysis and their inclusion in the evaluation process constitutes an important point in evaluating the reforms’ effects and could be inspiring for countries that have not yet implemented all reforms.

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