Abstract

The process of European railways reform and liberalization - ignited by EU directive 440 in 1991 - is still under way and far from being accomplished. The paper examines the «stop-and-go» pattern of such a process in Italy, suggesting that contradictory political decisions and missing or weak regulatory rules are mainly due to the multiple and conflicting roles of the government (as political actor, regulator and shareholder of the dominant firm). The paper also suggests that a «big push» to liberalization requires a pro-competitive design of markets and regulation, in particular regarding universal service obligations and the tendering of regional passenger services; incentive compatible price and quality regulations; clear-cut decisions about infrastructure investment and access-charges regulation; the design of a credible quasi-independent regulatory agency.