Governance in the regulation of the Spanish railway sector. A historical analysis 1844-1941

Economic history and economic theory seem to agree that concessions are the most appropriate strategy for regulating rail transport. At least, it was considered thus at the time of the industry’s origin in some countries, including Spain. The concessional system, however, is only the first step to resolving a complex economic problem. This text analyses the development of rail concessions in Spain, and studies factors that explain the regulator’s decisions and concessionaries’ reactions. A theoretical framework is established in the paper which concludes, taking into account the factual events, that the practice of railway regulation suffered from serious lacks and failings, and that these at least in part explain the ultimate failure of the concessional system in Spain.