Resumen de Intergenerational redistributive effects due to the financing formula of investments in transport infrastructure. A microeconomic analysis
Investments in major transport infrastructure projects involve a significant mobilisation of economic resources both for construction and operation. In these projects, to assess the efficiency of the resources used, decision-makers usually use cost-benefit analysis (CBA). This key element of welfare economics is carried out taking into account the effects for society as a whole. Social welfare is thus measured independently of who are the components of society receiving the benefits or suffering the costs. However, besides the best use of resources, which should be always ensured, transport projects often have other objectives. These objectives, which are ideally defined by the political programs of elected decision-makers, often involve redistributive effects. Favouring the economic development of less advanced regions is, for instance, an argument that is used to justify territorial biases in investment.
Practitioners have increasingly tried to identify redistributive effects to both create awareness of their existence and to quantify them in order to incorporate them rigorously in project appraisal. Intergenerational redistributive effects due to the financial scheme adopted for the project are a kind of redistributive effects that has neither been properly highlighted nor researched until now. The actual payments to cover the costs of projects unfolding over long timespans depend on the financing formula chosen and affect taxpayers and/or users of different generations. When transport investments are directly covered by the annual budgets of public administrations, they are paid by the taxpayers of the construction period but benefit users that will live in decades ahead. However, if the project is financed through loans, their payment schedule will define a very different financial time-profile. Relating the payments profile with the benefits produced by the project, which occur over its life cycle, can indicate the fairness of the distribution of expenditure and benefits across the successive generations affected by the project.
At microeconomic level, intergenerational impacts have been discussed, often with insufficient rigor, in relation to environmental sustainability and mostly regarding the appropriate discount rate to be applied in CBA. However, the financial structuring of the project could have a much stronger impact on a project’s legacy. The issue of the long-term implications of financial decisions is illustrated, at a broader macroeconomic level, by the problems of public debt confronted by many countries.
In this work the redistributive effects of transport investment projects are analysed, though the major contribution is the development of the “Intergenerational Redistributive Effects Model” (IREM). This microeconomic model allows performing an analysis of intergenerational impact for both major project of transport infrastructure and integrated investment programmes that is useful to obtain indicators of their utility for the successive (overlapped) generations concerned. Decision makers and financiers may use the IREM’s outputs when proposing a financial montage for a project and deciding the participation of private stakeholders and the contribution of users in it. They also can use the IREM’s indicators as insights to establish the most convenient financial montage to carry out a project.
In synthesis, what is presented, developed and tested is a tool to characterise the intergenerational impacts from major transport investment. These effects should be included in the wide concept of project sustainability but have, until now, been disregarded in spite of their importance for decision makers and financiers.
