Faculty of Business and Economics
Institute for Transport and Development
Annual Report
2015/16
Editors: Hans-Heinrich Bass and Hans-Martin Niemeier
Contents
Preface by Prof. Dr. Peter Laudi, Dean of the Faculty of Business and Economics
3
I. Research Projects
5
Promoting Sustainable Urban Transport in Vietnam (2010-2013)
6
Towards Food Security in West Africa (2010-2013)
8
Financial Speculation and Global Food Prices (2011-2014)
10
Repercussions of Global Economic Crises on Africa (2011-2014)
12
Decentralized Wastewater Treatment in Urban India (2014-2016)
14
II. Opinion Papers and Research Results
17
Green renaissance, not revolution
18
Economies of Scale and Scope of Airports: What do we know?
22
Why do Eastern European Airlines fail?
28
Growth and distributive effects of transport infrastructure investments in Kenya
34
III. Summer School
41
Report on the 1st SEE Summer School on Air Transport Economics
(SEEAirEconSSchool1) held on 9-13 September 2013 at FTTE, University of Belgrade 42
IV. Publications
45
Publications by ITD Members 2012-2014
47
Graduation Theses Supervised by ITD Members
51
ITD Annual Report 2015/16
Preface
by Prof. Dr. Peter Laudi , Dean of the Faculty of
Business and Economics
The activities of the ITD include applied research
in the fields of transport economics and development economics, as well as knowledge transfer
by consulting, the organization of colloquia and
expert seminars. In addition, the ITD promotes
research-based teaching, particularly the supervision of bachelors’ and masters’ theses within
the framework of the institute’s research projects,
and the promotion of communication among the
scientific community by organizing conferences
and publishing research results.
This is the second report which has been produced by the ITD. Readers will note that once
again in this report there are submissions from
current PhD students. We are proud of the fact
that several former PhD students who provided
material for the prvious report have completed
their studies and have earned their PhD degrees.
Special recognition must be given to Professor Dr.
Hans-Heinrich Bass and Professor Dr. HansMartin Niemeier who have given of their time and
expertise to co-chair this institute since its inception in January, 2010.
3
3
I. Research Projects
5
ITD Annual Report 2015/16
Promoting Sustainable
Urban Transport in
Vietnam (2010-2013)
Transport is both a precondition for and a result of
economic growth and material wellbeing. However, increasing mobility also triggers negative
effects, notably a severe strain on the natural
environment and the historical heritage. In newly industrializing and economically liberalizing
economies such as Vietnam, these processes
are tremendously accelerated compared to the
developments which took place a century ago in
today’s industrialized countries.
Vietnam’s capital Hanoi has particularly benefited
from the country’s economic liberalization, but it
also suffers from the ubiquitous motorized individual transport: numerous traffic accidents, severe
air pollution, noise, congestion, and the endangering of the capital’s historic Old Town quarters
following the growing demands for quick accessibility by motor bikes.
Given the fact that transport is one of the main
causes of greenhouse gas emissions, halting the
proliferation of motorized individual traffic has
become a task which demands international cooperation to mitigate the acceleration of climate
change by joint action.
Aims of the project
The cooperation of German and Vietnamese
partners aimed at exploring the possible, probable and desirable futures of the city and its urban
transport system, and at providing assistance to
define the decisions required today for the desired
scenarios and the envisioned city of the future to
become a probable outcome.
Methodology
As the urban transport system is but one sub-system in the urban context, its development cannot
be determined without due consideration of other
sub-systems. Therefore, this research project
adopted a multi-disciplinary approach, including
methods of ecology, economics, sociology and
political sciences, town planning, and fine arts.
6
Funding of the project
German Federal Ministry for Education and Research (BMBF); Wolfgang-Ritter-Foundation,
Bremen.
Lead researchers
Prof. Dr. Hans H. Bass (Institute for Transport
and Development, Bremen) and Dr. Huy Tuan LY
(Transport Development and Strategy Institute,
Hanoi)
Members of the Research Group
Prof. Christine Biehler (artist); Dr. Michael Bose
(CIM, Ho Chi Minh City); Dr. Axel Friedrich (ret., ex
Umweltbundesamt); Prof. Dr. Fujii Satoshi (Kyoto University, Japan); Prof. Dr. Karl-Hans Hartwig (IfV, University of Münster); Prof. Dr. Joerg
Knieling (Vice President, HafenCity Universität
Hamburg); Christopher Langelage ( ), ITD, Bremen University of Applied Sciences), Director Le
Do Muoi (TDSI, Hanoi); Mr. Ly Truc Dung (Hanoi);
Prof. Dr. Ernst Mönnich (ZPM, Bremen University
of Applied Sciences); Ms Christiane Molt (CIM,
Hanoi); Ms Christine Mader (Bremen University of
Applied Sciences); PD Dr. Dorothée de Nève (FU
Hagen); Mr. Nguyen Thanh Trung (Hessen-Büro,
Hanoi); Dr. Detlev Quintern (ITD, Bremen University of Applied Sciences); Prof. Dr. Jan Dirk Schmoecker (Kyoto University, Japan); Prof. Dr. Tu Sy Sua
(University of Transport and Communication, Hanoi); Dr. Van Hong Tan (Kyoto University, Japan).
Main institutional partners
Transport Development and Strategy Institute, Hanoi; Institut für Verkehrswissenschaft der
Westfälischen Wilhelms-Universität Münster;
Transport University, Hanoi; Department of Urban
Management Kyoto University, Japan; Abteilung Stadtplanung und Regionalentwicklung der
HafenCity Universität Hamburg; Auswärtiges Amt
der Bundesrepublik Deutschland; Bundesministerium für Bildung und Forschung, Verkehrsclub
Deutschland VCD.
ITD Annual Report 2015/16
Publications
Bass, Hans H. / Biehler, Christine / Ly Huy Tuan
(eds.), Auf dem Weg zu nachhaltigen städtischen
Transportsystemen, München: Rainer Hampp
Verlag, 2011.
Bass, Hans H. / Nguyen Thanh Trung / Ly Huy
Tuan (eds.), Huong toi cac he thong giao thong do
thi ben vung, Hanoi: ITDS, 2012.
Bass, Hans H., He thong van tai hanh khach noi
do tai Duc, 2010-2050: Nhung yeu to quyet dinh
va cac lua chon, in: Bass, Hans H. / Nguyen Thanh
Trung / Ly Huy Tuan (eds.), Huong toi cac he thong
giao thong do thi ben vung, Hanoi: ITDS, 2012, pp.
65-92.
Bass, Hans H. / Nguyen Thanh Trung, Traffic:
Imminent gridlock, in: Development and Cooperation, April 2013, pp. 169-171.
Reviews
International Quarterly for Asian Studies, Vol. 43
(1-2), 2012, pp. 143-145;
The German Journal of Contemporary Asia, Nr.
125, 2012, pp. 135-137.
Media reponse
Weser Kurier (20.07.2011); Viet Nam Kurier
(1/2013).
7
ITD Annual Report 2015/16
Towards Food Security in
West Africa (2010-2013)
West Africa has a huge potential for agro-industry development – particularly in the food sector.
Today, however, most processed food is imported.
Improving the local value-adding and national and
international marketing could considerably contribute to employment and income generation and
thus help reduce poverty, stabilize food provision,
and facilitate sustainable economic growth.
As it is predominantly women who are engaged
as (small) entrepreneurs in food processing, the
growth of this industry would also be of pre-eminent relevance for the participation of women in
the economy in general and for their economic
empowerment.
The development of this subsector is impeded by
a number of obstacles, including shortcomings
in ecologically sustainable production, economic
efficiency, loss-minimizing and clean harvesting
and storage, appropriate technical processing and
adequate channeling of the products into regional
and international markets
Aims of the project
In its first phase as a consultancy project commissioned by the United Nations (in 2010), the
research was aimed at an in-depth study of Mali’s
agro-industry sector and its sub-sectors, including the dynamics of the agribusiness enterprises,
the trade relations in the production chain from
agriculture to agro-industry, and the institutions
which are important for the functioning of the
agro-industry. Furthermore, it was also aimed
at identifying feasible policies to enhance agricultural growth for agribusiness, upgrading the
value chains, and stimulating private enterprise
development and investment. In its second phase
(starting in 2011 and financed by BMBF), the project was broadened to include an analysis of the
food processing industry in Ghana and Nigeria.
Furthermore, a case study on community gardening as a means to enhance food security on the
village level was conducted in Mali.
8
Methodology
The research project adopted a multi-disciplinary approach, including methods from ecology,
economics, agronomics, and cultural anthropology. For the village study, methods of Rapid Rural
Appraisal were applied.
Funding of the project
United Nations Industrial Development Organisation (UNIDO); German Federal Ministry for Education and Research (BMBF).
Lead researchers
Prof. Dr. Hans H. Bass (Institute for Transport and
Development, Bremen) and Prof. Dr. Reuben Alabi
(Ambrose Alli University, Ekpoma, Nigeria and
Alexander-von-Humboldt-Foundation).
Main members of the Research Group
Dr. Klaus von Freyhold (Institute for Transport and
Development, Bremen); PD Dr. Cordula Weisskoeppel.
Main institutional partners
United Nations Industrial Development Organization (UNIDO), Vienna; Institute for World Economics and International Management, University
of Bremen; Institut für Ethnologie und Kulturwissenschaft, University of Bremen; German Institute
of Global and Area Studies / Leibniz-Institut für
Globale und Regionale Studien, Hamburg; Überseemuseum Bremen; Aktion pro Afrika / Action
pour l’Afrique, Bochum (Germany) and Bamako
(Mali); German Federal Ministry for Education and
Research (BMBF); Wolfgang-Ritter-Foundation,
Bremen.
ITD Annual Report 2015/16
Publications
Media Response
Bass, Hans H., Country Case Study Mali, in: Karl
Wohlmuth / Patrick M. Kormawa / Jean Devlin,
Agribusiness for Africa’s Prosperity: Country Case
Studies, Vienna: United Nations Industrial Development Organisation (UNIDO), 2011, 2nd ed.
2012, pp. 197-266.
Süddeutsche Zeitung (Guest Contribution,
21.11.2011); Weser Kurier (Guest Contribution,
14.08.2011); Nordwestradio (Radio Interview,
http://www.ardmediathek.de/nordwestradio/
radio-bremen-glauben-und-wissen?documentId=18302606, 24.11.2013); Deutschlandradio
Kultur (Radio Interview, 30.01.2014).
Bass, Hans H., Food Security: Green renaissance,
not revolution, in: Development and Cooperation,
Food security, March 2012, pp. 107-109.
Bass, Hans H., Welternährung in der Krise, GIGA
Focus Global, Hamburg: German Institute of Global and Area Studies / Leibniz-Institut für Globale
und Regionale Studien, Nr. 5/ 2012.
Bass, Hans H. / von Freyhold, Klaus / Weisskoeppel, Cordula, Wasser ernten, Bäume schützen.
Ernährungssicherung im Sahel, Forschungsbericht, Bremen: Institute for Transport and Development, 2013, http://nbn-resolving.de/urn:nbn:de:0168-ssoar-325187.
Bass, Hans H. (ed.), Promoting the Production of Cashew, Shea, and Indigenous Fruits in
West Africa, ITD Annual Report Supplement 2,
Bremen: Institute for Transport and Development, 2013, http://nbn-resolving.de/urn:nbn:de:0168-ssoar-338461.
Bass, Hans H. / von Freyhold, Klaus / Weisskoeppel, Cordula, Water management and water
harvesting: How to overcome constraints in community gardening in semi-arid Mali, Proceedings
of the 2013 International Conference “Economic
Science for Rural Development”, Jelgava No. 31:
Integrated and Sustainable Regional Development, 2013, pp. 170-174.
Weisskoeppel, Cordula / von Freyhold, Klaus /
Bass, Hans H., Schrebergärtnern am Rande der
Wüste? Wege zur Ernährungssicherung im Sahel.
Ein Beispiel aus dem ländlichen Mali, in: Michael
Stiller und Michaela Grein, Faszination Afrika. Naturräume eines Kontinents, TenDenZen, Jahrbuch
des Überseemuseums Bremen, Bd. XIX, 2013, S.
29-40.
9
ITD Annual Report 2015/16
Financial Speculation
and Global Food Prices
(2011-2014)
In recent years, investors from outside the agribusiness (“non-commercials”) have tremendously
increased their participation in the international
futures markets for agricultural commodities.
In addition to commercial hedgers, traditional
non-commercial speculators and arbitrageurs,
“index investors” have become relevant in the
market.
Reasons include, firstly, structurally rising prices
for grain and soy since the beginning of the 1990s.
This trend results both from demand-side and
supply-side forces. Demand-side forces include
an increasing usage of grain for other purposes
than direct consumption, such as using grain for
animal feed and for the production of agro fuels.
Furthermore, demand for meat (and thus for
grain as animal feed) from emerging markets has
increased, in particular demand from China. On
the other hand, supply has been relatively falling
behind, due to the usage of acreage for the production of presently more profitable commodities
such as cotton, as well as due to a neglect of agriculture in many developing countries, especially in
Sub-Saharan Africa.
Secondly, financial investors are increasingly
convinced that investments should be in asset
classes not or slightly negatively correlated with
each other (Markowitz’ portfolio selection strategy). Furthermore, investors increasingly believe
that passive portfolio-management strategies,
i.e. the “replication” of the market by distributing
investments across all assets being represented
in popular indices (Malkiel’s random-walk strategies), are more successful than active selection
strategies (stock-picking). Finally, an AIG-financed
study by Gorton/Rouwenhorst from 2004/2006
has shown that, firstly, the performance of commodities as an asset class is slightly negatively
correlated with other asset classes and, secondly,
passively managed funds which include a variety
of investments into commodity futures have at
least a similar performance than other portfolios.
This has lead to a situation in which buying grain
and soy futures increasingly came into the focus
of financial investors.
10
Thirdly, the world-wide liberalization of financial
markets enabled investors to collect capital and to
systematically invest in agricultural commodity
markets. Instruments include Exchange Traded
Commodities (ETCs, since 2006), Exchange Traded Funds (ETFs, in the United States since 1993
and in Germany since 2000), as well as investment certificates (since the 1990s, in Germany in
particular since 2004) based on grain and soy as
underlyings.
Furthermore, investments in commodities as an
asset class have become appealing as a result of
two decades of falling returns on investment for
traditional low-risk financial investments, such
as government bonds. The reasons for this have
been: a global “savings glut” (Bernanke) both in
High Income Countries and in emerging markets,
especially in China; capital from countries such
as China looking for safe harbors abroad; central
banks’ all over the world flooding markets with
cheap money to overcome the financial crisis of
2009; deteriorating returns for processing industries fuelled by rising commodity prices; and
a self-enforcing money inflation driven by rising
commodity prices.
Finally, high liquidity leads to accelerating feedback processes in which increasing investments
in commodities futures lead to higher spot market
prices, thus increasing returns for previous investments, which in turn leads to new financial investments into commodity investments.
Aims of the project
The project aimed to analyze the transmission
mechanisms from investment in futures markets
to prices on spot markets and to quantify the effect of index investment in food-related financial
instruments on the spot market price trend, the
volatility of spot market prices and the emergence
of price bubbles as well as to analyze the impact
of world market prices on food prices in developing countries.
ITD Annual Report 2015/16
Methodology
Economic analysis and econometrics.
Funding of the project
Deutsche Welthungerhilfe e. V.; foodwatch e. V.
Lead researcher
Prof. Dr. Hans H. Bass (Institute for Transport and
Development, Bremen).
Main institutional partners
Deutsche Welthungerhilfe e. V.; foodwatch e. V.;
Institute for World Economics and International
Management, University of Bremen.
Publications
Bass, Hans H., Finanzmärkte als Hungerverursacher?, Bonn 2011: Deutsche Welthungerhilfe,
Persistent Identifier: http://nbn-resolving.de/
urn:nbn:de:gbv:46-00102366-18.
Bass, Hans H., De la pertinence de la spéculation,
in: Rural 21. Le journal international du développement rural, www.rural21.com/francais/news/
detail/article/de-la-pertinence-de-la-speculation-0000176/ (08.03.2012).
Bass, Hans H., Vortrag anlässlich einer Einladung
von Jürgen Fitschen zu einem Gesprächskreis der
Deutschen Bank mit Vertretern aus Wissenschaft
und Zivilgesellschaft zum Thema „Preisentwicklung bei Agrarrohstoffen – Wer ist wie in der
Verantwortung?“, 16.04.2014.
Media Response (Selection)
Radio Corax (Radio Interview, 18.04.2011, http://
www.freie-radios.net/40509); 3sat (TV Interview nano, 24.08.2012, http://www.3sat.de/
mediathek/index.php?display=1&obj=32170); Der
Tagesspiegel (28.01.2013); Tagesschau 24 (TV
Interview, 21.11.2013); ARD Mittagsmagazin (TV
Interview, 21.11.2013, http://www.daserste.de/
information/politik-weltgeschehen/mittagsmagazin/ sendung/2013/foodwatch-lebensmittel-nahrung-spekulation-100.html); Der Tagesspiegel
(22.11.2013); die tageszeitung taz (22.11.2013);
junge welt (22.11.2013); Handelsblatt (22.11.2013);
Hannoversche Allgemeine Zeitung (22.11.2013);
Frankfurter Allgemeine Zeitung FAZ (22.11.2013);
Süddeutsche Zeitung (22.11.2013); Neues
Deutschland (Interview, 29.11.2013); Weser Kurier
(Interview, 02.12.2013).
Bass, Hans H., Index speculation – A new challenge for world food security, in: Wyzwania
Gospodarki Globalnej. Challenges of the Global
Economy, Pracy i Materiały Institutu Handlu Zagranicznego, Nr. 31, Gdańsk: Uniwersytet
Gdański 2012, pp. 719-728.
Bass, Hans H., Finanzmarktspekulation und Nahrungsmittelpreise: Anmerkungen zum Stand der
Forschung, Studie für Foodwatch e. V., Materialien
des Wissenschaftsschwerpunktes „Globalisierung
der Weltwirtschaft“, Bd. 42, Universität Bremen:
2013.
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ITD Annual Report 2015/16
Repercussions of Global
Economic Crises on
Africa (2011-2014)
Since the beginning of the millennium, African
economies have made some – even if slight –
progress. Between 2000 and 2007, the average
annual growth rate of GDP in Sub-Saharan Africa
(SSA) was 5.0 per cent. Although this figure is
low if compared to the low- and middle-income
economies in general, where annual growth during these years averaged 6.2 per cent in absolute
terms, it is substantially higher than the world’s
average of 3.3 per cent (all data: World Bank WDI,
2012). Today, some of the progress made in Africa
is in jeopardy as a result of an increasingly adverse
global economic environment.
In the economic turmoil since 2008, Sub-Saharan
Africa’s GDP per capita has grown by 1.5 per cent
annually. If compared to low-income countries in
general, the region of Sub-Saharan Africa was not
only comparatively harder hit by the first phase
of the Global Economic Crisis – economies in this
region found it on average also more difficult to
recover.
However, for low-income economies, and especially for African economies the emerging second
phase of the global crisis may be more detrimental
across the board than the situation in 2009 was.
Repercussions of a Eurozone Crisis on the world
economy in general are possible – which in turn
will affect demand from other parts of the world.
Crisis transmission mechanisms may include a
shrinking volume of commodity exports; a shrinking volume of service exports (especially tourism
services); shrinking financial transfers, especially
workers’ remittances, and official development aid
(ODA); shrinking inflows of capital in the forms of
portfolio investment and direct investment (FDI);
in oil- and food-importing countries: rising prices
of these import commodities, as these are prone
to speculative investments following overshooting
liquidity coupled with a shrinking of real-economy
investment opportunities; in F.CFA-countries:
rising prices of import commodities from outside
of the Euro- and WAEMU-zone. It should also not
12
be overlooked that in 2013/14 many African countries will be less able than in 2009 to counteract
an economic crisis by expansionary fiscal policies
due to the deterioration which has already occurred in their fiscal balances.
Developments of a positive nature for the African
economies may include: declining import prices,
both for capital goods and consumer goods as a
result of deflationary processes in Europe; an increase of FDI seeking to reduce costs or to secure
access to extractive industries, including land
for food production; in oil-exporting and non-oil
raw-materials exporting countries: rising prices of
export commodities due to the still noticeable raw
materials price boom; in F.CFA-countries: increasing price competitiveness vis-à-vis major export
markets, due to the depreciation of the F.CFA
especially vis-à-vis the Chinese currency.
As always, the net effect of the opposite effects
will depend on a country’s specific characteristics.
Therefore, the repercussions of the Euro crisis
on African economies again need not be uniform
either: On the one hand vulnerability differs, but
on the other hand different economies display
different resilience features and governments will
find different policy options at their disposal to
confront the contagion mechanisms.
Aims of the project
The project aimed to assess the relative strengths
of a number of possible crisis transmission mechanisms and available buffer mechanisms in
African economies. It also undertook to construct
an index to capture the impact of the different
transmission mechanisms and buffer features in
one variable to allow for comparisons between
the African economies. Finally, it looked for policy
options to mitigate the crisis transmission.
Methodology
Economic analysis and econometrics.
ITD Annual Report 2015/16
Lead researchers
Prof. Dr. Hans H. Bass (Institute for Transport and
Development, Bremen); Dr. Hans-Hermann Steinbeck (ret., Norddeutsche Landesbank, Hannover).
Main institutional partners
Institute for World Economics and International
Management, University of Bremen; German Institute of Global and Area Studies / Leibniz-Institut
für Globale und Regionale Studien,
Hamburg; Norddeutsche Landesbank, Hannover;
Wolfgang-Ritter-Foundation, Bremen; Institut
für Wirtschaftsforschung Halle; Egyptian Centre
for Economic Studies, Kairo; Russian Academy of
Sciences, Institute for International Economic and
Political Studies, Moscow; European Centre for
Development Policy Management, Brüssel.
Publications
Alabi, Reuben Adeolu / Alemazung, Joy / Bass,
Hans H. et al. (eds.), Africa and the Global Financial Crisis Impact on Economic Reform Processes,
African Development Perspectives Yearbook, Vol.
15, Münster: Lit-Verlag 2011.
Bass, Hans H. / Steinbeck, Hans-Hermann, [Afrika im Sog der Euro-Krise; in russischer Sprache],
in: mir Perenem, Russian Academy of Sciences,
Institute for International Economic and Political
Studies, Moskau, No. 2 / 2013, pp. 89-94.
Bass, Hans H. / Steinbeck, Hans-Hermann, Afrika
im Sog der Euro-Krise, GIGA Focus Global, Hamburg: German Institute of Global and Area Studies
/ Leibniz-Institut für Globale und Regionale Studien, Nr. 2 / 2013.
Bass, Hans H. / Steinbeck, Hans-Hermann, The
Euro Crisis and Macroeconomic Management
in Africa, in: African Development Perspectives
Yearbook, Vol. 16, Münster: Lit-Verlag 2014, pp.
105-146.
13
ITD Annual Report 2015/16
Decentralized Wastewater Treatment in
Urban India (2014-2016)
India seeks in co-operation with the international
community to halve the proportion of the urban
population without access to “improved sanitation” during the period of 1990-2015 – from 50
percent to 25 percent. An improved sanitation
facility is defined by the WHO / UNICEF Joint
Monitoring Programme for Water Supply and
Sanitation (JMP) as a system that hygienically
separates human excreta from human contact.
Instrumental in achieving this target is mainly the
connection of flush toilets to a sewer or to a septic
tank, whereby bathing and washing facilities are
also important. In addition, it is compulsory to
ensure sufficient clarification of the wastewater
before it is fed back into the water cycle and thus
to drinking water reservoirs via underground and
above-ground aquifers.
In fact, however, sanitary facilities and adequate
wastewater treatment are still largely neglected
aspects of human and economic development in
India. According to the latest JMP data from April
2013, despite some successes still 40 percent of
urban residents in India are without access to improved sanitation. Half of them use shared toilets
without a sewer or open defecation, resp. Given a
population of nearly 400 million urban dwellers,
this means that 80 million are without any access
to sanitary facilities. With continued urbanization,
this huge number of excluded people cannot be
expected to shrink in absolute terms in the near
future despite great efforts.
Due to the extremely high population density in
the slums of Indian cities, the impact of this situation on the individual, but also on Indian society
and the Indian economy as a whole, is fatal and
acceptable neither from an ethical nor from an
economic point of view. Many diseases transmitted through person-to-person contact could
be prevented by improved sanitation. The WHO
estimates that one third of all deaths of children
under the age of 5 are due to lack of hygiene in
drinking water and wastewater.
14
Moreover, the lack of sewage treatment leads
to immense ecological damage. Currently, only
20 percent of the daily wastewater from India‘s
households is clarified. Households are thus one
of the most significant sources of water pollution
in India. The flora and fauna of the waters is permanently damaged by the resulting hypertrophy.
The amount of locally available drinking water and
agriculturally usable water is reduced.
Central sewerage and sewage treatment are public goods par excellence: Below the capacity limit
of a plant the cost of an additional use (the marginal cost) is close to zero. At the same time due
to the goal of comprehensive disease prevention
within an existing catchment area no one can be
excluded from using it. Therefore this good must
be provided by the state and financed through
taxes, dues or fees.
For the construction of central sewage treatment
units political influence thus needs to be mobilized. However, due to insecure land rights and the
lack of participation this is not often possible in
Indian slums. The alternative, to set up latrines
with septic tanks in individual households (i.e. the
organization of sanitation facilities as a private
good) has to be ruled out for hygiene reasons in
the cramped quarters, as well as for financial reasons in most cases.
Thus a “middle” solution suggests itself: decentralized wastewater treatment systems (DEWATS). In India there is an enormous demand for
DEWATS on the part of the neighbourhoods in
semi- and sub-urban low-income settlements and
in peri-urban towns. Decentralized wastewater
treatment systems have actually been implemented in many places in India as a cost effective
alternative to central systems – usually commissioned by local government units, and co-financed
by international donors. Due to the above-mentioned problems in the implementation of central
facilities such decentralized systems are not to be
understood as an interim solution, but as full-fledged long-term solutions.
ITD Annual Report 2015/16
In economic terms, DEWATS can be characterized as “commons” (or collective goods). No one
can reasonably or technically be excluded from
the use of a collective good (here: for reasons of
avoiding contagion) – but there is a rivalry of use.
From the studies of Nobel laureate Elinor Ostrom
(1990) it is generally known that specific forms
of economic governance are necessary to avoid
the „tragedy of the commons“ (Hardin, 1968), i.e.
a simultaneity of overuse and underfinancing.
In the case of DEWATS, improper management
results in an overuse by residents of a larger than
originally planned catchment area and a neglect of
maintenance by the neighborhood or community
actually in charge of the facilities.
documentation and development of best practice
solutions at the institutional level; development
of new ways for the transfer of new business
insights. Thus, the focus of the research project
is not technical issues, but rather a composite of
technical and socio-economic issues.
The factors that actually determine the success
and failure in detail, however, are largely unknown – not only by the commercial and non-profit
providers of DEWATS, but also in development
studies. Therefore, with the technical establishment of a DEWATS a sustainable solution to the
problem of inadequate sanitation and inadequate
sewage treatment in the slums and peri-urban
settlements is by no means always achieved –
despite many successes. The desire for a better
knowledge is all the more urgent when, for efficiency reasons, a scaling-up of the system size is
unavoidable.
Main institutional partners
Methodology
Socio-economic analysis.
Lead researcher
Prof. Dr. Hans H. Bass (Institute for Transport and
Development, Bremen)
Consortium for DEWATS Dissemination Society
(CDD Society), Bangalore; Centre for Advanced
Sanitation Solutions (CASS), Bangalore; Rajiv
Gandhi Rural Housing Corporation Ltd; Bremen
Overseas Research and Development Association
BORDA e. V.
Aims of the project
The research project aims on the one hand to
close the existing gaps in knowledge about the
factors of success and failure. On the other hand,
it will enable the practical implementation of the
findings not only in India but also in other developing and emerging economies. The research
project is therefore designed in two phases. In
the first phase, it is aimed to identify economic,
organizational, social, cultural and psychological
factors contributing to the success or failure of a
DEWATS in India. In the second phase of the research project, while taking account of the results
of phase One, there are three tasks to be solved:
identification of sustainable financing solutions;
15
II. Opinion Papers and Research Results
17
ITD Annual Report 2015/16
Green renaissance, not
revolution
by Hans H. Bass
As Africa‘s food problems become more acute,
calls for a green revolution are increasing. But
such ideas are often based on misconceptions. A
green renaissance with a focus on food security
rather than intensively produced cash crops would
make more sense.
ration, the World Bank subsidiary that supports
the private sector. Some African governments
share this view. It is, however, based on a number
of misconceptions.
African agriculture is finally back in the spotlight
of international development debate. The reason is not just the most recent famine. There are
lasting problems which affect farming in Africa.
In striking contrast to all other parts of the world, average output per acre has been stagnating
in Africa for decades. Indeed, the continent‘s‘
fast-growing population means that output per
capita is actually falling. Inadequate facilities for
storage and transport aggravate the problems,
causing massive losses on the way “from field to
fork”.
The first misconception relates to the availability
of land. Anyone familiar only with farming systems in Europe or North America is easily misled
to thinking that much African land is not being
used. In fact, such land may serve a great variety
of different purposes that are not obvious at first
glance. In mixed land use systems in semi-arid
areas, for example, farmers normally leave arable land fallow for several years. The gathering
of leaves and fruits from trees and shrubs and
interlaced grazing cycles of nomadic herders complement the land use in a sustainable manner. Not
land but water is the bottleneck-resource.
It is often said that Africa still has vast areas that
are fertile but unfarmed, so the use of high-yield
seed, pesticides and synthetic fertiliser could
trigger an African green revolution. If linked to
new highways and served by upgraded ports,
these land resources would turn into a real competitive advantage. African farmers would then
not only tackle hunger in their own continent but
could also contribute to satisfying world market
demand for soy and cereals for the production of
meat and agro-fuels.
An important element in this strategy are multinational companies and government funds from
emerging economies, such as India and China,
which are leasing large areas of arable land in
Africa in anticipation of high world market prices.
Adherents of the idea of a green revolution argue
that these investors will also transfer the technology and expertise needed for an up-to-date
agro-industry. African contract farmers would
then be integrated into global supply chains and
become familiar with modern information technology and up-to-date finance practices.
Pronounced proponents of this view include the
McKinsey Global Institute, the OECD’s Development Centre and the International Finance Corpo-
18
Three misconceptions
The under-use of vast open spaces in Africa is
a myth. Many smallholder farmers in semi-arid
areas have begun to reduce fallow seasons and
keep nomads’ livestock off their fields. Land conflicts are becoming more frequent. The poor soil
quality of new plots is an important reason for low
productivity.
Even in the forest regions, the appearance of lush
African fertility is deceiving. Almost all nutrients
are in the living biomass; infertile rock is close to
the surface. Even if one disregards climate change, it would be impossible to use such land for
intensive farming for long. Where intensive farming is possible, however, it is already being done,
for instance in the Kenyan highlands or in densely
populated Rwanda with its many small plots. The
truth is that Africa does not have abundant vacant
land.
The second misconception is that an increase in
food production will, by itself, overcome hunger.
History teaches us that green revolutions mostly
benefit large landowners. They are the ones who
can recoup the investment in irrigation and machinery. Accordingly, land ownership becomes
concentrated, and smallholders get displaced.
ITD Annual Report 2015/16
When harvests fail, their yields are no longer
suffice for survival, and since they have no other
opportunities for generating income, they cannot
purchase food either. The highways turn into open
veins: Trucks take the harvests from the big farms
to the cities, and the hungry stay behind – or flee
to refugee camps and urban slums.
The third misconception concerns the net benefits
of leasing land to international investors. In reality,
the downsides outweigh the advantages. All too
often, modern commercial farming renders traditional land use impossible. In Mali, for example,
two huge areas are now used to produce rice for
export to Libya and sugarcane for the national
market. The irrigation channels have become insurmountable obstacles that cut across the routes
of nomadic herders. Irrigation often also leads to
the desiccation of soil within a wide radius. On the
other hand, the new jobs for farm labourers are
mostly seasonal and poorly paid. Management
and professional tasks tend to stay in the hands
of experts from the investors’ home country, and
seed and even agrochemicals are imported from
Asia’s emerging economies.
Whether an African economy really benefits from
investments in large-scale irrigation is also moot.
According to World Bank data, the costs of a conventional large-scale irrigation project are three
times higher in Africa than in Asia. The reasons are
the particularities of African soils and their fast
salinisation due to evaporation. Only up-to-date
irrigation technology, which requires much capital
and maintenance, can bring the African project
costs closer to the Asian benchmark. Capital, of
course, is a crucial constraint in Africa.
Over the centuries, African farmers developed
agriculture systems that meet the challenges of
water shortage, barren soils, and extreme weather
conditions. Their strategies to minimise risks and
to mutually ensure security evolved over generations. Nomads’ herds, for example, used to be a
mixture of drought-resistant species and fast-reproducing ones. When farmers cleared fields, they
tended to spare trees because they are relevant
for medicinal substances, forage and articles of
merchandise. Some farmers still optimise the use
of major rivers’ flood plains by planting and relocating various crops according to their specific
water requirements.
Unfortunately, these sophisticated and appropriate land-use systems are under pressure today.
Many pastoralists are abandoning nomadic life
and replacing it by sedentary animal husbandry.
As the composition of herds is changing, they
become more vulnerable to drought. It is also
quite common that the animals are owned by
city-dwellers as a sort of saving scheme. These
people in particular want their herds to grow, but
hardly invest in animal health. Growing herds,
however, are a strain on the land. They are not
sustainable in the long run. In the rural areas concerned, even the people are under threat, because
animals and humans compete for the scarcest
resource: water.
More and more trees are cut down for firewood or
animal fodder. In semi-arid areas, irrigation puts
trees in danger. Where water is pumped from
deep wells, trees are prone to wither and die in a
wide radius. Biodiversity is being eroded fast.
Monocultures of standardised crops are another
problem. African eating habits are increasingly
falling into line with international ones, so wheat,
maize and rice are beginning to predominate. The
snag is that African soil is not really suitable for
these cereals. African farmers will never be able
to compete with their American counterparts who
grow them.
Better alternatives
Despite some historic examples of anthropogenic
destruction of livelihoods by over- and misuse,
African farmers in general understood their soils
and the subtle interaction of crops and animals
very well. This treasure is worth preserving.
What is needed is a green renaissance – not
harking back to an alleged golden age, but re-interpreting traditional practices in the light of
present-day conditions. Today, international agricultural research focuses on wheat and rice, but
19
ITD Annual Report 2015/16
virtually ignores African plants. To date, the role
the traditional crops could play is recognised only
by a few research institutes in Switzerland, Taiwan
and Germany, which are performing pioneering
work in this field. The World Bank’s Indigenous
Knowledge Initiative is also worth mentioning.
The yields achieved by modern organic farming in
the tropics can be as high as those of conventionally modernised agriculture. That was confirmed
by various studies, including those conducted in
Uganda and Tanzania by the UN Conference on
Trade and Development (UNCTAD). Organic farming is of course more sustainable. It requires and
contaminates less water, maintains soil fertility
and does not depend on expensive inputs such as
synthetic fertilisers and pesticides. The international community should recognise and reward
such positive impacts in terms of environmental
protection, and so should national governments.
African countries’ tax and subsidy policies tend to
keep prices low in urban food markets. The idea
is to prevent urban unrest. However, it would be
much more important to tackle poverty in rural
areas, where the need tends to be greatest and
people tend to be driven into urban slums.
Food security needs to be at the heart of any support for the agricultural sector, whether it takes
the form of advice for small farmers or funding
for infrastructure. Food crops are more important
than cash crops, rural roads are more important
than highways, local and regional markets are
more important than the world market. Neither
poverty nor hunger will be eliminated by economic
growth alone. These challenges need to be addressed directly.
Since animal husbandry must be environmentally sustainable, African herders have to understand that quality matters more than quantity.
Veterinary services and compulsory vaccination
programmes could contribute to raising awareness. The herders, however, are not the only ones
that matter – so do city-dwellers who invest in
herds. Unfortunately, sheer herd size is still widely
regarded as an expression of wealth. It is crucial,
therefore, to create more meaningful investment
opportunities.
20
Finally, what is needed are small rural industries
close to agriculture – especially in food processing. As the example of China shows, small rural
industries boost regional productivity thanks to a
better division of labour. They can – and must –
generate income for landless families and reduce
the pressure to migrate. Where produce is processed straight after harvest, losses are minimised,
which in turn improves food security.
In this respect, traditional methods of drying
vegetables or fish are more important than sophisticated cold chain systems for the supply of
urban supermarkets. Following a gradual improvement in quality and a niche specialisation, African producers could then also learn how to supply
international markets. But the second step must
not be taken before the first one.
ITD Annual Report 2015/16
Economies of Scale and
Scope of Airports: What
do we know?
By Malte Lechmann and Hans-Martin Niemeier
Introduction
The nature and breadth of economies of scale and
scope are essential for airport economics, management and policy.
Are airports public utilities because economies of
scale and scope lead to a natural monopoly which
needs to be publicly owned or regulated?
Should airports (of which size) be subsidized to
cover their high fixed costs? How many airports
should there be in a region on narrow economic
ground abstracting from environmental externalities?
•
Will a region like Berlin gain if it closes two of
its three airports and concentrate its traffic on
one?
•
Will new airports enter the market or does this
not happen because of planning restrictions?
•
Is terminal competition feasible because economies of scope are limited?
•
Can freight be separated from passenger
traffic? How can national traffic be split from
international traffic without any economic
costs?
•
Is the tendency to develop commercial activities only driven by demand complementarities
or are there cost complementarities to be
reaped as well?
This list of questions can easily be extended, but
it is already obvious that the nature and scope of
economies of scale and scope are essential for all
important problems of governance, regulation,
planning, pricing and management of the airline
industry. The importance is, however, negatively
related to what textbooks and even a number of
benchmarking studies say about these economies.
The standard view (Graham, 2008 and Doganis,
22
1992) has been that economies of scale run out at
a level of three or five million passengers. This is
surprisingly low as it implies that there are hardly
any barriers to entry other than legal and planning
restrictions. Market entry could occur at regions
serving six to ten million passengers so that, for
example, most European airports would face
real or potential competition. Given the expected
growth rates, we would expect in the near future
airports entering markets so that in most cities
and regions two or more airports will compete
intensively making regulation obsolete. The EU
directive on charges should then revert its threshold, that is, instead of regulating airports of
more than five million, it should regulate small regional airports in rural areas. It is therefore necessary to challenge the standard view by critically
reviewing the existing literature (for a complete
review see Lechmann and Niemeier (2013) ). Ask
at what output level run out economies of scale?
Do diseconomies occur at all? Do economies of
scope exist and if so between which activities?
Economies of scale in the operation of an airport
There have been several studies concerning the
examination of economies of scale in the airport
industry. Although these studies are concerned
with the same industry they come to very different conclusions.
One of the first who applied DEA for the measurement of economies of scale were Pels et al
(2003). They used the airport’s surface area (ha),
number of aircraft parking positions at the terminal, number of remote aircraft parking positions, number of runways and number of runway
crossings as input factors to measure air traffic
movements (ATM). ATM served also as an indirect
input for air passenger movements (APM), whereby the further input factors for APM were number
of check-in desks and number of baggage claim
units. With their estimations Pels et al. reached
ITD Annual Report 2015/16
the conclusion that an average airport (12,5 Mio.
PAX and 150.000 ATM) exhibit constant returns
to scale in ATM and increasing returns to scale in
APM. This indicates that there are no economies
of scale in ATM but that they can be realized in the
movement of passengers.
Bazargan and Vasigh (2003) used PAX, annual
air carrier movements as well as other air traffic
movements as output measures. Thereby, they
employed operating expenses, non-operating expenses, number of runways and number of gates
as input factors. As an outcome of their study,
they reach the conclusion that small airports are
more efficient than large airports, whereby they
differentiate the airports according to the percentage of national enplaned passengers.
Two of the first who applied econometric estimations for calculating the cost structure of airports
were Doganis and Thompson (1974). They assumed a Cobb-Douglas cost curve, using WLU as
output measure. To account for different activities
of airport operation they categorized the cost into
total, capital, maintenance, labor, administrative
and operating cost. The study concluded that economies of scale exist up to three Mio. WLU.
Tolofari et al. (1990) applied a translog cost function to account for more flexibility. Like Doganis and Thompson (1973) they used WLU as an
output measure, whereby they indicated labor,
equipment, residual factors and capital stock as
the inputs of an airport. Further variables include
PAX per ATM, fraction of international passengers from overall passengers, percentage of used
terminal capacity, and trends over time. They
estimated that economies of scale exist up to 20.3
Mio. WLU, but London Heathrow, with the highest
volume of 38.2 Mio WLU over the observed period
was the only airport in their sample which reached
this size. The second biggest airport included in
their sample, Gatwick reached only a volume of
18.5 Mio. WLU. This leaves room for discussion
about the range of the cost curve beyond this
point and thus their result cannot be generalized.
In 1995 Doganis et al. chose, like the studies
mentioned above, WLU as physical output measure and in addition value added as a financial
output measure. To account for different cost for
domestic respectively international passengers,
they differentiated between them. They divided
their measured input factors in labor and capital,
whereby the input factor labor consists of fulltime equivalent, employee wages and salaries,
and capital of capital charges including depreciation and interest rates and asset values. In their
study Doganis et al. (1995) differentiated between
three different regions where the airport was
located, Northern Europe, Southern Europe and
United Kingdom(UK)/Ireland. They found that at
Southern European airports as well as UK/Irish
airports Economies of Scale exist up to five Mio.
WLU and that they are not relevant at Northern
European airports.
Main et al. (2003) included two different data
sets in their study and thus reached two different
conclusions. As input factors the study used price
of staff, price of other costs, passengers per ATM,
the percentage of international passengers and
total assets. Concerning the operating costs Main
et al. (op.cit.) differentiate between including and
excluding of depreciation. The study reached the
conclusion that economies of scale are highly
relevant up to four Mio. PAX and five Mio. WLU
and exist up to 64. Mio. PAX and 80 Mio. WLU.
For the second dataset Main et al. (2003) used
the same input but measured only the WLU as
output. As for the first study, they first calculated
the short run total cost curve. To reach the long
run average cost they added operating costs with
an eight percent interest rate and divided the sum
by WLU. Thereby they estimated that clear economies of scale exist up to 90 Mio. WLU.
23
ITD Annual Report 2015/16
In 2005, Jeong composed a study of the operating costs of an airport, whereby he applied a
translog cost function, which was proposed by
Tolofari et al. (1990). He found that economies of
scale exist up to 2.5 Mio. PAX or three Mio. WLU.
The study indicates PAX and WLU as the output
of an airport, but also creates a so-called output
index. This output index consists of PAX, number
of aircraft movements, and non-aviation revenue.
Labor and other expenditures like operating and
soft costs include contractual services.
The latest study related to the econometric estimation of airports cost function is provided by
Martin and Voltes-Dorta (2011). It is one of the
few studies including the diversification of the
airport business. They come to the conclusion
that increasing returns to scale exist and are not
exhausted at any level. They also found a strong
indication of economies of scope between domestic and international passengers as well as
between aviation and commercial non aviation
activities. In their multi-product translog long-run
cost function they constructed an output-index,
which included the differentiation between domestic and international passengers, commercial
ATM as well as tons of cargo and commercial non
aviation revenues. As their input factor they combined the financial factors of labor, material and
capital costs with the physical inputs of terminal
floor and warehouse area, runway length, number
of gates as well as check-in desks and full-time
equivalent employees and total landed MTOW.
Drawbacks of the analyzed studies
The studies analyzed are all concerned with the
measurement of economies of scale in the operation of an airport. Thereby almost all of them reach the conclusion that economies of scale exist,
although the point where these economies of scale are exhausted, differs. The standard view that
economies of scale run out at three to five million
passengers seems however not well founded and
most probably underestimates the threshold.
But there are several drawbacks included in their
estimations. As shown in the analysis, the most
common output measure used is the so called
WLU. This measure is introduced to incorporate
the combination of passenger and cargo output.
This is highly critical since it can be argued that
the production processes and machineries necessary for the handling of each differ a lot. So while
useful for the output measurement of airlines,
this output-factor is not for measuring the output
of airports (Doganis, 1992). By focusing on only
one fraction of the airport business the authors
of these studies leave out the influence of the
diversification of the airport business. Chow and
Fung (2009) have proven that the existence of
economies of scope have a strong influence on the
measurement of the airports efficiency, indicating that the results of the studies are concerned
with only one aspect of the airport business and
give a false picture. The operation of an airport
consists of several different commercial areas
which should be considered in the analysis of the
airport business to give a complete picture of the
airport’s business. Especially the non-aviation
sector of the airport business and its importance
are rising. This should be brought more in the
focus of the examination of airports activities. The
studies which used DEA to predict economies of
scale base their conclusion on their estimations
of returns to scale which is, per se, not false but
incomplete. Economies of scale are not the same
as increasing returns to scale thus it is possible
that economies of scale exist although there are
no increasing returns. Further drawbacks of the
studies analyzed include, for example, a too small
sample size as in Tolofari et al. (1990).
25
ITD Annual Report 2015/16
Conclusion
References
The evaluation of the studies which analyzed
economies of scale at airports has shown that
they give an incomplete picture of the airport
business and its industry. A sufficient international comparison of airports would need to take into
consideration that airports in different countries
have different accounting procedures thus have a
different cost structure. This kind of study should,
in addition, differentiate between private and
public ownership of the airport for similar reasons.
Subsidies, especially in the form of land received
from local governments, are often not accounted for in the books of airport managers or not
with adequate depreciation. The studies analyzes
furthermore, lack the reflection of the diversified
airport business. Leaving out the multi-business
aspect of the airport gives an insufficient picture of the airport. Conclusions drawn from such
investigations will always be false and thus misleading. A sufficient study of economies of scale
and scope at the operation of an airport would
enable predictions of the competitive situations of
the airport industry. This gives the decision-maker
the opportunity to adequately react to possible
market failures. The results of such a study could
also point to a reduction of regulation and to an
increased privatization of the airport industry. This
would be evident especially if the outcome would
indicate that smaller regional airports are inefficient because they cannot create a high traffic
volume large enough to benefit from economies
of scale.
Bazargan, M., and Vasigh, B. (2003), Size versus efficiency:
a case study of US commercial airports, Journal of Air Transport Management Vol.9, pp. 187–193
Chow, C.K.W., and Fung, M.K.Y. M.K.Y. (2009), Efficiencies
and scope economies of Chinese airports in moving passengers and cargo, Journal of Air Transport Management Vol. 15
Nr. 6, pp. 324–329
Doganis, R., and Thompson, G.F. (1973), ‘The Economics of
British Airports’, Report of an Investigation sponsored by the
Social Science Research Council, London
Doganis, R., (1992), ‘The Airport Business’, Routledge Chapman & Hall
Doganis, R., Lobbenberg, A., and Graham, A. (1995), ‘The
Economic Performance Of European Airports’, Research
Report 3, Department of Air Transport, Colleague of Aeronautics, University of Westminster, London
Graham, A., (2009), How important are commercial revenues to today’s airports?, Journal of Air Transport Management Vol. 15, pp. 106-111
Jeong, J.H. (2005), ‘An investigation of operating costs of
airports: focus on the effects of output scale’, Master Thesis,
University of British Columbia, Vancouver, Canada
Lechmann. M., and Niemeier, H.-M. (2013), Economies of
scale and scope of airports – a critical survey, Journal of Air
Transport Studies, Volume 4 - Number 2, Summer 2013, pp
1-25
Main, B., Lever, B., Crook, J. (2003), ‘Central Scotland Airport Study’, Hume Occasional Papers, Vol. 62, Edinburgh
26
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Martín, J.C., and Voltes-Dorta, A. (2008), International
Airports: Economies of Scale and Marginal Costs, Journal of
the Transportation Research Forum Vol. 47, No. 1, pp. 1-22,
Fargo, USA
Martín, J.C., and Voltes-Dorta, A. (2011), The dilemma
between capacity expansions and multi-airport systems:
Empirical evidence from the industry’s cost function, Transportation Research Part E Vol. 47, pp. 382-389
Pels, E, Nijkamp, P., and Rietveld, P. (2003), Inefficiencies
and scale economies of European airport operations, Transportation Research Part E Vol. 39, pp. 341–361
Tolofari, S.N., Ashford, J., and Caves, R.E. (1990), ‘The Cost
of Air Service Fragmentation’, Loughborough University
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ITD Annual Report 2015/16
Why do Eastern
European Airlines fail?
by Yusaf H. Akbar, Adél Németh and Hans-Martin
Niemeier
Introduction
In December 2012, József Váradi, CEO of Budapest-based Wizz Air, CEE’s biggest LCC, said
that CEE state-owned airlines are “very vulnerable” due to poor management and operational
inefficiencies. “If it was purely down to market
conditions, none of these airlines would be flying
today. They’ve been bailed out by governments.
The question is how long will they keep flying”
(Ponikelska, 2012). Yet economically irrational
claims persist even after Malév finally went out of
the market and maeny airlines continue to make
losses. By July 2013, it was announced by a Hungarian entrepreneur that a new Hungarian airline,
Solyom Hungarian Airways, would be launched
from September 2013 claiming that it could profitably operate routes formerly offered by Malév.
Moreover, both CSA and LOT continue to exist having survived numerous State Aid investigations
by the EU Commission and still showing no significant signs of an improvement in performance.
CSA needed a 44 per cent equity injection from
Korean Airlines to avoid bankruptcy. Thus despite
Mr. Váradi’s claims, poor performance persists
and market dynamics clearly cannot fully explain
the outcomes in this industry.
In this paper we provide an overview of the history and performance of Malév, Lot and CSA and
thereafter discuss several explanations developed
in the literature and add some evidence for a
complimentary explanation, namely the theory of
‘permanently failing organizations’.
History and performance
LOT and CSA were founded before and Malév after the Second World War. The three airlines with
their respective major airports were part of the
centralized planning system of Council for Mutual
Economic Assistance (CMEA).
After the collapse of the USSR, Czech Republic,
Hungary and Poland went through a “transforma-
28
tional recession” (Ickes, 2008) with a GDP reduction of 20 to 30 per cent. From this shock Czech
Republic and Hungary like most other states had
not even recovered in the year 2000. The exception is Poland that experienced strong growth
so that by the years 2000 its GDP was thirty per
cent above the level of 1989. According to Estrin
(2008) the central problem of this transformation process was the privatization of the former
state-owned enterprises. Politically these states
sought integration with the West that was achieved in 2004 with the membership in the EU.
In the first period of this transformation process
the air transport market was strictly regulated by
the state. The state owned airlines were preparing
for the limited competition on international markets by modernizing theirs fleets and by forming
alliances with western carriers. All three carriers
began to substitute Boeing, Mc Donnell-Douglas
and Airbus aircrafts for their aging Ilyushin and
Tupolev planes and signed alliance agreements
with western carriers (as did LOT with Austrian in
1990, with Delta in 1992, with American Airlines
in 1994, with BA in 1998, with Lufthansa in 2002;
Malév with PANAM in 1989, with KLM in 1991).
Furthermore, privatization of the carriers was on
top of the the state’s privatization list for public
assets. For all three carriers talks and preparation
began as in the early nineties for Malév in 1991,
for CSA in 1992 and for LOT in 1996. The objective
was to achieve privatization within a few years but
all these attempts largely failed.
The second period starts with negotiations on
liberalizing the air transport markets in 1999
(Pisarek, 2009). In December 2000 the EU Commission reached agreements with the new member states to establish a common air transport
market in 2004. Up to this point the flag carriers’
dominant position on the internal markets were
protected by bilateral air service agreements. For
example LOT transported 60 per cent of all passengers departing from Poland airports. The flag
ITD Annual Report 2015/16
carriers operated a limited hub and spoke system.
The hubs at the airports of Warsaw and Prague
were fed by feeder flights from regional airports
such as Kosice, Krakow and Wrocław. Direct
flights from regional airports to other European
destinations were the exception. This changed
with liberalization.
clear for the government that they needed to
privatize the airline again, but instead, the airline
received further financial state injections on two
occasions since there was no political consensus
to push through the privatization (nor a willing
buyer at a price offered by the Hungarian government).
The third period is characterized by market entry
of low cost carriers and the erosion of market
shares of the former flag carriers. In the four years
of the common air transport market LOT lost half
of its market share mainly to Wizz Air and Ryanair
which now dominate the market and serve European destinations from regional airports like
Gdansk and Krakow. Shortly before the grounding
of Malév in February 2012 the flag carrier only
had 43.7 per cent seat capacity share, while LCCs
in Hungary held 24 per cent market share. In the
Czech Republic LCCs had 22.3 per cent seat capacity market share by the end of 2011.
When Malév was finally sold to Boris Abramovich
in 2007, he also signed a cooperation agreement
between AirBridge, his holding company, with
Austrian Airlines clearly producing a conflict of
interest between his ownership of the Hungarian
airline and the commercial interests of AirBridge.
The first attempt to privatize Malév was made
between 1992 and 1997, when a 35 per cent stake
was sold to the Alitalia and Simest Consortium.
Alitalia, another state owned company, had (and
still has) efficiency problems and in particular due
to its veto right, slowing down the already heavy management processes, the efficiency losses
doubled in both airlines’ operations. Furthermore, soon after taking a stake in Malév, Alitalia
was unable to realize its expectations for better
connections to Russia and Eastern Europe. Malév
was supposed to feed the Italian market; however,
the airline preferred to preserve its independency
and maintained long haul services to New York
and South Korea, despite the obvious absence
of demand. Unsurprisingly, the ‘double hubbing’
strategy failed shortly afterwards. Re-nationalization was carried out in two steps: In 1997 two
private Hungarian banks purchased the stakes,
and the Hungarian State bought back its share in
1999 from the banks.
The year 1999 also turned out to be the last one
for Malév with positive operating results. It was
CSA has a similar history, with several failed privatization attempts. In 1992 the Czech Republic sold
its flag carrier’s minority shares to Air France. This
was a short marriage, after two years the carrier
became state owned again. However, the cooperation between the French and the Czech carrier
remains strong, especially after CSA’s accession
to Sky Team in 2001. Yet, CSA was disappointed
after AF/KLM withdrew their privatization bid in
2009.
In another similarity with Malév, the EU Commission launched a State Aid investigation on the
24th of February 2010. The Commission expressed concerns over the questionable rescue package of the Czech government, namely to combine
CSA and the Prague airport operator into one
state-owned company including a loan of €94m
to CSA from a state-owned company, Osinek.
The Malév state aid investigation was launched 3
months before the Czech process and took a little
more than 2 years to decide. In the case of CSA
the EU Commission concluded on the 19th of September, 2012 that the amount is in line with EU
state aid rules: “A significant capacity reduction,
efficient cost and revenue management and the
sale of assets should ensure the company‘s longterm viability without continued state support,
whilst avoiding undue distortion of competition”
(EU COM, 2012).
29
ITD Annual Report 2015/16
In turn, LOT was partly privatized in 1999. Swissair obtained first 10 per cent, than in 2001 up
to 37.6 per cent shares in the Polish flag carrier.
Unfortunately, Swissair itself was not performing
well and was replaced by Swiss International
Airlines. In Central and Eastern Europe “LOT is
probably the only one that‘s viable over the long
term” cited the Financial Times (Reed et. al., 2001)
a London investment banker more than 10 years
ago. He might be right, at least until now. LOT
became majority state owned again in 2002. The
airline joined the Star Alliance in 2003. Probably
because of the sharply increasing LCC competition
after Poland’s EU accession in 2004, LOT decided
to establish its own low cost subsidiary, Centralwings in 2005. The strategy was not successful
and Centralwings became insolvent in 2009.
In November 2012, the EU Commission State
Aid investigation against LOT concluded that the
closed tender to sell three LOT subsidiary companies (LOT Catering, LOT Ground Services and
LOT Maintenance Services) to the Polish state did
not constitute a State Aid under EU competition
policy rules.
Across a range of holistic and partial performance indicators, both quantitative and qualitative,
the CEE carriers are inefficient by a large degree
relative to its competitors, loss making and were
perceived by customers to offer poorer quality
services than their putative rivals. For organizations that were expected to be facing market driven disciplines, this suggests that they were able
to survive despite their poor performance.
Figure 1 describes the profit and loss per passenger in the period 2000-10. None of the airlines
was able to sustain profits for more than two subsequent years. For most of the decade all airlines
making losses.
30
Figure 1:
Profits and losses per passenger
Source: Akbar et al. (2014)
Explaining poor performance
Industrial organization and economic theory
generally posits that persistently inefficient firms
would be forced to exit the market – especially
when the industry is experiencing unprecedented
deregulation. Theories of business strategy would
also suggest that firms that consistently produce
below average industry returns would be forced
to change strategies if they wish to change the
trajectory of firm performance. Yet, we see in the
aviation sector a persistent repetition of seemingly unsuccessful strategies across airlines and
over time (see Akbar et al. 2014).
Five arguments have been identified as the main
explanatory factors concerning the aviation sector.
First, in the last two decades, the industry has
experienced severe impacts from progressive
phases of deregulation with sheltered national
markets being exposed to competition producing
significant losses for incumbents.
ITD Annual Report 2015/16
Second, there is an economic logic driven by minimum efficient scale that questions the economic
feasibility of smaller airlines: if an airline is too
small and offers too narrow a range of services, it
cannot serve enough customers to cover its fixed
and sunk costs.
Third, poor performance of the industry is inextricably related to ownership structures and soft
budget constraints imposed by owners of the
airlines – notably the state. In the knowledge that
underperformance will not be punished through
liquidation of assets and exit, managers of airlines
are not forced to operate under market based
efficiency criteria.
Fourth, airlines have invested substantial resources in protecting themselves from competition
through rent-seeking behavior – especially at
the national level. The success of this activity has
been one of the main reasons for the imposition of
soft budget constraints by owners.
Fifth, deregulated air transport markets might
have no stable long run equilibrium. Airline markets might be inherently instable and the lack of
profitability is an empty core phenomenon.
All five arguments are relevant. Clearly changing
market structures, evolving technologies and
basic cost features of the industry would explain
performance. However, none of these studies can
explore at the organizational level how internal
practices, processes and discourses contribute to
the performance of the firm nor do they examine
their persistent existence despite poor performance.
Thus in Akbar et al. (2014), we identify a sixth
related and complementary explanation for airline
performance, namely that airlines are a category
of organizations that have been characterized as
“permanently failing”. This concept first developed
by Meyer and Zucker (1989) asserts that the
continued survival of these firms is contingent on
serving the interests of certain dependent actors
(both internal and external to the organization)
who have, by various means, come to replace the
presumably more purely economic interests of
shareholders and owners. This framework has
been applied in several industries; this is the first
time it has been applied to the aviation sector.
Two phenomena are necessary for the emergence of permanent failure. First is that there is core
variance in views about how to arrest decline in
performance within the organization. For example
top management disagrees about the strategy of
the firm faced with its external context: about the
nature of competition; how the company should
position itself in the market; how it should manage its relationships with firms. On a tactical level,
doubts about feasibility of the strategy and resource constraints produce conflicts over how to
implement the strategy as articulated by top management, and on the operational level, resistance
to change creates a mismatch between strategic
goals and operational outcomes.
Second, there are differing interests between on
the one hand those seeking organizational performance (typically private owners) and those seeking organizational preservation or maintenance
(i.e. dependent actors such as employees or state
owners). Thus permanent failure is likely to intensify when the goals of private owners and other
actors are more likely to be divergent. In chronic
stages of permanent failure, the firm is not only
incapable of deriving a strategy due to disagreement within the organization; its actors operating
within the organization begin to develop strategies in direct contradiction to the explicitly articulated one.
In theory, owners could dismiss their agents
where divergences threatened the performance
related interests of these owners. For example,
they could liquidate their investment or replace
the top management. Yet, the PFO allows for the
co-existence of two divergent goals and this phenomenon is explored below when applied to CEE
carriers.
31
ITD Annual Report 2015/16
Our research (see details in Akbar et al. 2014
shows that elite management interviews provided
a rich explanation of events at these airlines, and
successfully confirmed the robustness of the permanent failure concept. Despite persistently bad
performance, these airlines continued to exist for
extended periods of time and considerably longer
than efficiency based explanations for performance can account for. The explanation for Malév’s
exit can be found in the changing constellation
of interests among external stakeholders in this
case – in particular the EU Commission’s refusal
to permit the State Aid. Evidence from our research suggests that the EU Commission’s decision
to rule against the subsidy was due to a failure of
the Hungarian government to credibly make the
case for continued support for Malév (in contrast
to both CSA and LOT).
References
Akbar, Y., Nemeth, A., and Niemeier, H-M., (2014), Here we
go again... The Permanently Failing Organization: An application to the airline industry in Eastern Europe, Journal of
Air Transport Management Vol. 35 No. 1 pp. 1-11
Estrin, S., ‘Privatization Impacts in Transition Economies’, in:
Durlauf, S., and. Blume, L. E. (eds), (2008), The New Palgrave Dictionary of Economics, 2nd Edition. London: Palgrave
Macmillan
EU COM, (2012), ‘State aid: Commission approves restructuring aid for Czech Airlines’, IP/04/856. Brussels: European
Commission
Ickes, B. W., ‘Output Fall – Transformational Recession’, in:
Durlauf S., and Blume, L. E. (eds), (2008), The New Palgrave Dictionary of Economics, 2nd Edition. London: Palgrave
Macmillan
Meyer, M.W., and Zucker, L., (1989), ‘Permanently Failing
Organizations’, Newbury Park, CA: Sage Publications
Pisarek, R. ,(2009), Air transport liberalisation in the European Union and its impact on development of the civil aviation
sector in Poland, Comparative Economic Research: Central
and Eastern Europe, Vol. 12 No. 3 pp. 45-58
Ponikelska, L, Balazs, E., and Webb, A., (2012), ‘East Europe
Airlines Shrivel as Funding Ebbs And Buyers Flee’, accessed
on 4th December 2012 at http://washpost.bloomberg.com
Reed, J, Kester, E. and Anderson, R., (2001), ‘Eastern European flag carriers begin to feel the pinch: Governments may
have to swallow their national pride’, Financial Times. 11th
October, 2001 Thursday, London Edition
32
ITD Annual Report 2015/16
Growth and distributive
effects of transport
infrastructure investments in Kenya
by Eric Tchouamou Njoya
Introduction
Transport plays a major role in the support of economic activities given its influences on production
costs, access to labour, markets and investment.
Investments in transport infrastructure have
in general important implication on the rate of
growth of the economy, government budget and
also income distribution. Though the transport
receives substantial share of public budgeted
funds in terms of infrastructure investments and
subsidies, it contributes to national public budgets through direct and indirect taxes, licence fees
and other specific charges. It is often argued that
transport has the potential to engender positive
externalities in the economy. Transport improvements which arise through infrastructure investments can be treated like autonomous increase
in productivity. Todd (2010) argues that economic
efficiency increases if transport resource costs
are reduced or if the value provided by transport
activity increases. This is justified, in particular, by
the impact on time savings which can be re-allocated to more productive use. The impact can
then be worked out through the application of a
macro-economic model of the economy.
According to World Bank (2013) estimates, the
transport sector in Kenya contributed about 6%
to the GDP. In a study conducted by Briceño-Garmendia and Shkaratan (2011) on Kenya’s infrastructure, it was established that between 2000
and 2010, infrastructure contributed 0.5 percentage points to Kenya’s annual per capita GDP
growth. The authors argued that raising Kenya’s
infrastructure to the level of Africa’s middle-income countries would increase its contribution up
to 3 percentage point. In recent years, Kenya has
allocated substantial sums to address transport
infrastructure needs. According to KNBS (2014),
transport related project allocation increased by
18% to 123.6 billion KES for the period 2012-2013.
However, by and large, Kenya’s transport infrastructure indicators still remain below the levels
found in Africa’s middle-income countries.
34
Briceño-Garmendia and Shkaratan (2011) highlight that in order to catch up with developing
countries in other parts of the world, Kenya needs
to invest $4 billion per year in various infrastructure projects, including power, transport, irrigation and information and communication technology. Relative to the size of the economy, Kenya
would need an additional $2.1 billion per year (11%
of GDP) to meet that funding goal. With respect
to transport, Kenya would need to spend a total
of US$0.56 billion per year in the next decade,
split fairly evenly between capital expenditure
(US$0.27 billion) and operations and maintenance
(US$0.29 billion). The authors outline that investment alone would absorb around 15% of GDP.
This level of effort would be comparable to what
China has invested in infrastructure in recent
years.
In 2012 the Kenyan Ministry of Road Transport
published a Transport Policy paper which identifies current and future challenges of the transport
sector and addresses the modalities of its reorganization (MoR, 2012). The aim of the policy is to “
attain an efficient roads sub-sector that supports
and promotes economic growth through the cost
effective provision and maintenance of roads
infrastructure, while aligning the management of
the sub-sector with the Constitution” (MoR, 2012,
p.8).
This paper seeks to contribute to a better understanding of the link between transport, growth
and income distribution among household groups
in Kenya by analysing the following questions:
to what extent would transport infrastructure
expansion affect the development of the economy
and what household group is likely to benefit and
by how much of additional investment in transport infrastructure?
ITD Annual Report 2015/16
The state of Kenya transport infrastructure
Kenya is a low income country with a gross per
capita domestic production in 2014 of approximately US$1,016 (WEF, 2014). The Kenya economy
grew by 5% in 2013, and it is expected to grow by
5.1% in 2014 (KNBS, 2014). At the sectoral level
the transport sector recorded a growth of 3.3%
compared to 3.1% in 2012 (KNBS, 2014). 78% of
the 47.6 million inhabitants (2011) live in rural
areas, of which 30% have adequate access to
the transport system (World Bank, 2013). Road
transport is the only means of access to rural
communities and accounts for 93% of the total
movement of passengers and freight in Kenya
(MoR, 2012). Transport infrastructure development is one of the key pillars of the Vision 2030,
the country’s new development blueprint covering
the period 2008 to 2030. Vision 2030 envisages
that Kenya will become a globally competitive
and prosperous middle-income country within the
next two decades.
Road transport is used as example to show the
main achievements and challenges of Kenya’s
infrastructure sectors (for information on other
sub-sectors see Briceño-Garmendia and Shkaratan, 2011). Table 1 below presents key findings for
the road transport.
A comparison with low income countries (LIC)
and middle income countries (MIC) indicates
that Kenya’s length of the trunk network is more
than adequate. Other achievements include good
maintenance provision and high quality sector
institution. Nevertheless, the country faces a huge
rehabilitation backlog which absorbs maintenance
funding. Moreover, road sector investments (at
around 1% of GDP in 2006) were low by regional
standards and addressing the rehabilitation backlog would require one-time push on road sector
investments (Briceño-Garmendia and Shkaratan,
2011).
Previous Studies on the impact of transport infrastructure investment
The impact of the use of transport on the wider
economy has been widely studied using various
methods. Using an econometric approach whereby aggregate production function includes public
infrastructure as an additional input, Aschauer
(1989) investigated the relationship between the
stock of transport infrastructure and the level of
economic output. In order to examine the impact
of transport investment, Baum and Behnke (1997)
used a growth accounting approach which allocated total growth in the economy to the growth of
labour and capital and then the unexplained residual to other relevant factors, such as transport
infrastructure investment.
Table 1: Benchmarking indicates good quality, density low but adequate for connectivity
Unit
LIC
Kenya
MIC
Paved road density
Unpaved road density
GIS Rural accessibility
km/1000 km² of arable land
86.6
152
507.4
km/1000 km² of arable land
504.7
930
1,038.3
% of rural pop within 2 km from
all-season road
21.7
32
59.9
Paved road traffic
Average Annual Daily Traffic
1,049.6
1,108
2,786.0
Unpaved road traffic
Paved network quality
Unpaved network quality
Perceived transport quality
Average Annual Daily Traffic
62.6
38
12.0
% in good or fair condition
80.0
84
79.0
% in good or fair condition
57.6
63
58.3
% firms identifying as major business
constraint
23.0
37
10.7
Source: Briceño-Garmendia and Shkaratan, (2011)
35
ITD Annual Report 2015/16
Morisugi and Hayashiyama (1997) attempted
an ex-post evaluation of the impact of Japanese
railways on the growth of GDP over the period
1875-1940. They used a CGE model assuming an
economy of identical individuals, private enterprises, a transport sector and a government which
balanced budgets. The utility function of consumers included the value of goods and the value of
travel which depended on the level of equipment.
Likewise production depended on the transport of
freight, labour and capital using a CES production function. The model depended on parameters
derived from historical data and suggested that
the contribution of the rail network to the growth
of GDP, which depended essentially on the reduction of transport costs, was 0.5% in 1875, the date
when the construction of the network started,
and had grown to 12.3% in 1940.
Kasuku and Macharia (2003) argued that in Kenya, rural road infrastructure improvements have
had positive impacts on the provision of cheap
access to markets for both agricultural outputs
and manufactured inputs. Obare (2000) outlined
that in Nakuru District (a county in Kenya, located
about 150 km from the port of Mombasa) a reduction of access costs by 10% translated into average production costs savings of Kenyan Shillings
(KES) 14,000 per hectare (KES 1 = ca.115 Euro).
The ex-post evaluation of a 1974 government
initiated programme to improve communication
and transportation in the rural areas indicates
that over the period 1974 and 1983, owing to that
programme, sales of farm produce increased by
51%, farm income by 27%, non-farm cash earnings by 11%, and total household earnings by
20% (MoITC, 1983). A value chain analysis for Kenya’s tourism sector acknowledged the impact of
infrastructure limitations on overall costs in Kenya
(Christie et al. 2010). According to this study, the
highest cost within the safari package is inland
transport for a weekend excursion. From a perspective of a developing country, the absence of a
well developed transport system is a constraint to
growth and poverty reduction.
Methodology
This study employs computable general equilibrium models (CGE) in a dynamic setting to
36
investigate the relationship between government
spending on transport infrastructure and economic growth and income distribution in Kenya. CGE
models can be defined as a set of equations describing the behaviour of various economic agents
(for example, industries, households and governments) when faced with changes in key economic
variables, for example, and most importantly,
relative prices. Thus, a CGE model is an attempt
to use general equilibrium theory to empirically
analyse allocation and income distribution issues.
Many economic theories involve optimization behaviour of economic agents under given resource
and technology constraints. Households maximize
their utility subject to their budget constraints
and firms maximize their profits subject to their
production technology constraints. Solutions of
these optimization problems yield the demand
and supply schedules respectively. Markets equilibrate demand and supply by adjusting prices.
This theoretical structure is usually derived from
neoclassical microeconomics. Hence, CGE models
can depict such market economies in a quantitative manner.
The model draws on the contributions to CGE
models by Dervis et al. (1982), Robinson et al.
(1999), Decaluwe et al. (2010). CGE models use
actual economic data to estimate how an economy might react to changes in policy, demand
and other external factors. The model for this
study is calibrated to a numerical database, namely, the 2003 Kenyan Social Accounting Matrix
(SAM), jointly developed by the Kenya Institute for
Public Policy Research and Analysis (KIPPRA) and
the International Food Policy Research Institute
(IFPRI) (Kiringai et al., 2006). A SAM represents
an economy-wide accounting of expenditures and
incomes of agents for a particular year. It differs
from an Input-Output table in that households
are included and all accounts are fully balanced
(Rutherford and Paltsev, 1999). The 2003 SAM for
Kenya distinguishes 50 sectors and 20 household
categories grouped by deciles.
Simulations of a 20 percent increase in the transport infrastructure investment-to-GDP ratio
across twenty time periods were conducted. It
was assumed that the investment is financed through foreign borrowing (Simulation 1) or alterna-
ITD Annual Report 2015/16
Table 2: Simulation results (% deviations from baseline)
Simulation 1
Short term
Long term
0.050
0.717
GDP
-0.004
0.180
Total export
0.10
0.260
Total import
0.026
0.152
Total aggregate consumption
Disposable income:
Average all househoulds
Rural households
Rural lower households
Rural upper income households
Urban lower income households
Urban upper income hourseholds
0.064
0.062
0.075
0.055
0.067
0.080
0.080
tively through production tax (Simulation 2). The
simulation was conducted using a model which is
calibrated to 2003 – 2023.
Key findings
Macro-economic and distributional impacts (Table
2) that can be expected over time from an increase in transport infrastructure are reported for the
following periods: the short term (the fifth year
following the investment) and the long term (the
twentieth year).
An increase in transport infrastructure drives economic growth through improvement in productivity. The increase in transport infrastructure investment is projected to induce and increase real GDP
by 0.05% in the short term and by 0.171% in the
long term under simulation 1. The corresponding
figures under simulation 2 are 0.02% and 0.179%,
respectively.
Transport infrastructure investments stimulate
consumption and investments. On the demand
side, household incomes increase owing to a rise
in labour and capital factor returns. Increased
incomes allow consumers to enjoy a high level of
aggregate real consumption, which increases under simulations 1 and 2 by 0.026% and 0.023%,
respectively, in the short term and by 0.052% and
0.177% in the long term.
0.157
0.149
0.165
0.143
0.153
0.165
0.169
Simulation 2
Short term
Long term
0.020
0.197
-0.001
0.202
0.08
0.560
0.023
0.177
0.048
0.054
0.049
0.055
0.021
0.044
0.038
0.167
0.160
0.153
0.171
0.168
0.177
0.172
Increase inflow of foreign finance leads to an
appreciation of the real exchange rate, which
leads to an increase in imports and the contraction of the exports. The changes to total export are
negative in the short term. Thus, appreciation of
Kenyan’s exchange rate leads to imports substitution (0.1% and 0.26% in the short and long term,
respectively) and the contraction of the export
sectors, which lose in terms of competitiveness.
However, under production tax financing simulation, competitiveness of export-oriented sectors
slightly improves.
Different household groups are impacted differently. Although transport infrastructure investments benefit all household groups, overall, urban
households are the main beneficiaries under simulation 1 in the short and long run. With respect
to income distribution, foreign financed transport
investment is not a ‘pro-poor’ strategy because it
brings about a real appreciation that undermines
profitability and reduces employment in tradable sectors, notably agriculture, from which rural
households derive a substantial fraction of their
income. However, production tax financing transport investment leads to a significant and positive improvement in income distribution. Rural
households are the main beneficiaries under this
scenario.
37
ITD Annual Report 2015/16
Conclusion
In this paper, attempts have been made to assess
the link between transport investment and income distribution in Kenya by using a CGE approach.
Results indicate that transport expansion has
positive effects on the Kenyan economy. Under
foreign borrowing financing, the 20% increase in
transport investment generates an annual percentage change in GDP of 0.05% on average, aggregating to an overall percentage change in GDP
of 3.29% from the first (2003) to the last (2023)
period. Under transport investment financed by
the production tax, GDP cumulates to 3.57% over
the period 2003-2023. The net effects of increased transport investments depends on trade-offs
between the positive productivity impacts and the
negative impacts of the appreciation of the real
exchange rate (under simulation 1) and the distortionary effects of the increased tax burden (under
simulation 2).
Results further show that transport expansion
adversely affects certain sectors in the short run.
However, the negative effects gradually decline
over time and positive effects become increasingly
large. Overall, the economy gains from increased
transport investment in the long run impact. With
respect to household incomes, there are notable
differences between the two simulations. The
above findings indicate that though all household
groups may benefit from transport investments in
terms of income distribution, the outcome is dependent on the finance mechanisms of additional
transport investment.
38
References
Aschauer, A.D. (1989), ‘Is Public Expenditure Productive’,
Journal of Monetary Economics, Vol. 23, No. 2, pp. 177-200.
Baum, H., and Behnke N. (1997), ‘Influence of Economic
Growth on Transport Development’, Transport and Economic
Development, OECD Publication.
Briceño-Garmendia, C., and Shkaratan, M. (2011), ‘Kenya’s
infrastructure: a continental perspective’, Working Paper
5596, Washington, DC: World Bank, Africa Region, Sustainable Development Department
Christie, I., Fernandes, E., Messerli, H., and Twining-Ward,
L. (2013), ‘Tourism in Africa: Harnessing Tourism for Growth
and Improved Livelihoods’, Washington, DC : World Bank.
Decaluwé, B., Lemelin, A., Robichaud, V., and Maisonnave,
H. (2010) PEP-1-t. Standard PEP Model: Single-Country,
Recursive Dynamic Version [Online] Réseau Politique économique et Pauvreté/Poverty and Economic Policy, Université
Laval, Québec.
Dervis, K., Demelo, J., and Robinson, S. (1982). General
Equilibrium Models for Development Policy. Cambridge:
Cambridge University Press.
Kasuku, S., and Macharia, L. (2003), ‘Links Between Transport and Poverty: A Review Of Transport Policies’, in Kenya
National Forum Group on Transport and Development,
Kenya and The Links With Poverty Reduction, August, 2003.
Retrieved November, 11 2013, from http://www.ifrtd.org/
files/uploads/pw_kenya.pdf.
Kiringai, J., Thurlow, J., and Wanjala, B. (2006). A 2003 Social Accounting Matrix (SAM) For Kenya, Kenya Institute for
Public Policy Research and Analysis, Nairobi, and International Food Policy Research Institute, Washington, D.C.
KNBS - Kenya National Bureau of Statistics (2014), Kenya
Facts and Figures 2013, Retrieved March, 11 2014, from
http://knbs.or.ke/.
MoITC – Ministry of Information Transport and Communications (1983), ‘A Baseline study of Rural Access Roads in
Kenya’, Nairobi MoITC.
MoR – Ministry of Road (2012). Policy on Aligning the Roads
Sub-Sector with the Constitution. http://www.kenha.co.ke/
pdfs/mor_policy_paper_on_constitution_realignment.pdf
Morisugi, M., and Hayashiyama, Y., ‘Post-Evaluation of the
Japanese Railway Network, 1875-1940’, in: Quinet, E. and R.
Vickerman (eds.) (1997), The Econometrics of Major Transport infrastructures, Macmillan, London.
Page, S.J. (1994), Transport for Tourism, Routledge, London.
Robinson, S., Naude, A.Y., Ojeda, R.H., Lewis J.D., and Devarajan, S. (1999). From stylized Models: Building Multisector
CGE Models for Policy Analysis., North American. Journal of
Economics and Finance, (10), pp. 5-38.
Rutherford, T., and Paltsev, S. (1999), ‘From an Input-Output
Table to a General Equilibrium Model: Assessing the Excess
Burden of Indirect Taxes in Russia’, Department of Economics, University of Colorado, mimeo.
Todd, L. (2010), ‘Evaluating Transportation Economic Development Impacts: Understanding How Transport Policy
and Planning Decisions Affect Employment, Incomes, Productivity, Competitiveness, Property Values and Tax Revenues’, Victoria Transport Policy Institute. Retrieved December
11, 2013 from http://www.vtpi.org/econ_dev.pdf.
World Bank (2009), Rural Transport - Rural Access Index
(RAI), Retrieved March 17, 2014 from www.worldbank.org.
World Bank, (2013). World Development Indicator. The
World Bank.
39
III. Summer School
41
ITD Annual Report 2015/16
Report on the 1st SEE
Summer School on Air
Transport Economics
(SEEAirEconSSchool1)
held on 9-13 September
2013 at FTTE, University
of Belgrade
Background
This event, with the focus on aviation and transportation economics was organized by the Hochschule Bremen and German Aviation Research
Society (GARS), in cooperation with a number
of Universities and research institutes from
South-Eastern Europe , and funded by the German academic exchange (DAAD). It was hosted
by the Division of Airports and Air Traffic Safety/
Faculty of Transport and Traffic Engineering at the
University of Belgrade ((UB-FTTE), Prof. Radosav
Jovanovic) and was attended by undergraduate,
Master and PhD students as well a young researcher. The Summer School included also two specialized one-day workshops: One on aviation infrastructure economics and a second on Southeast
Europe (SEE) air transport issues, with collaboration with industry and government specialists.
Why focus on air transport? Air transport is critical to support economic growth and employment.
The air transport industry generates a total of
32 million jobs globally. According to ICAO , the
industry transports close to 2 billion passengers
annually and some 35% (by value) of goods traded
internationally. Over 40% of international tourists now travel by air. Aviation’s global economic
impact (direct, indirect, induced and catalytic) is
estimated at USD 3,560 billion (€2,600 billion),
equivalent to 7.5% of world gross domestic product. The world’s 1,715 airlines have a total fleet
of nearly 23,000 aircraft. They serve some 3,750
airports through a route network of several million
kilometres managed by around 160 air navigation
service providers.
42
Given the geographical position of the region, the
under-development of crucial transport connection of the region with the rest of Europe, and
the lack of transport links within the region, air
transport in the SEE region needs to be developed
further, to facilitate its economic integration and
growth. The SEE region could be a hub for Europe-Middle East, but its Europe-Asia transport
links are currently on the periphery of the global transport system. The creation of centers of
excellence in transportation research/program
of study in transportation science will contribute
to building the educational capacity required to
provide intellectual leadership to enable (a) creation of an efficient transport network within the
SEE region; and (b) transformation of the regional
transport infrastructure to facilitate inclusion of
SEE into the global transport network as a key
hub for passenger and freight transportation
between Western Europe and the Middle East/
Asia. The regional program/centers will focus on
educating the next generation of transportation
industry professionals for the region, and providing state-of-the-art research, which will be used
by the industry and policy-makers to help achieve
the above-described goals.
ITD Annual Report 2015/16
Goals
The Summer School
The goals of the SEEAirEconSSchool 1 were:
The tutorials focused around a series of lectures on these topics and were intended for senior
year and graduate students having an interest in
aviation, as well as for industry professionals. The
Summer School also provided a good opportunity
to get to know other experts and students working in the field and to establish contacts that may
lead to research collaborations in the future.
•
The deepening the cooperation among the
academic partners in Germany and in SEE to
develop specialized courses and enhance the
training of (graduate) students in the framework of a specialized program
•
The strengthening the empirical research
basis for students, researchers and interested
experts in the field by creating a substantial
online database from existing operational and
financial databases as a basis for an extended
teaching program with special research support for MA and PhD theses..
•
Creating a research network of excellence in
the industry which can become a driving force
in advising regional sector policy.
•
Inclusion of different viewpoints on the industry from an airline, airport, Air Traffic Control
or regulatory perspective.
•
Fostering students’ curiosity for long-term
challenges in air transportation with regard to
the environmental and economic sustainability
and to social and political impacts.
•
Introducing students to the wide variety of
career options in the aviation sector and related industries, such as general transportation,
tourism and logistics, with the aim of attracting the best young talents to the industry.
Tutorials included the following presentations:
•
Demand for air travel (Prof. Boris Begovic,
University of Belgrade)
•
An introduction to air transport economics (Dr.
Daniel Sallier, Paris Airports Authority)
•
Air transport agreements (Dr. Sven Maertens,
German Aerospace Center)
•
Airport costs and revenues (Prof. Juergen
Mueller, G.A.R.S.)
•
Airline product and market structure (Prof.
Volodymyr Bilotkach, Newcastle University)
•
Emissions trading scheme in aviation (Wolfgang Grimme, German Aerospace Center)
•
Economic regulation of airports (Prof.
Hans-Martin Niemeier, Bremen University of
Applied Sciences)
•
Efficiency and productivity in air transport industry (Tolga Uelkue, Humboldt Univ. of Berlin
/ Gordana Savic, Univ. of Belgrade / Bubalo
Bubalo, Univ. of Hamburg)
43
ITD Annual Report 2015/16
•
Airport planning (Prof. Stanislav Pavlin, University of Zagreb)
Follow up
The overall organisation of the Summer School
Competition policy in air transport (Prof. Frank can be considered as successful pilot project; even
Fichert, Worms University of Applied Scienso we are still a long way off from reaching the
ces)
goals stated in the introduction. Individual feedback from professors and participants after the
• The economics of air navigation services proSummer School indicates that the program was
vision (Prof. Rodosav Jovanovic, University of very interesting and helpful. Lecturers were in
Belgrade)
general highly appreciated. The slides and further
material are available online at www.garsonline.
• Airport commercial revenues and the regude. The evening event was a great opportunity for
latory till (Caroline Wanders, Commission for
open and interesting discussions and networking
Aviation Regulation in Ireland)
for all participants. Finally, it is important to note
that thanks to the financial support from DAAD,
Workshops
all travel and accommodation expenses incurred
by participants could be reimbursed.
The Workshop on aviation infrastructure economics gave researchers an opportunity to present
We therefore aim to continue and extend the 2013
innovative work on all aspects of aviation infraBelgrade Summer School on air transport econostructure economics, such as: alternative policies mics, along with its two specialised conferences,
on infrastructure charging; quantification and
to 2014 and to deepen the cooperation between
management of infrastructure congestion costs;
the German/West European partners and the SEE
airport and air navigation services provider (ANSP) institutions. Given the lessons that we have lebenchmarking; economic regulation of airports
arned and the suggestions that we have received,
and ANSPs, etc. In addition, the aim was to enwe will be able to improve the overall concept and
courage young researchers to present their work
to develop more specialized courses (for exampin this environment, where they are also guided
le by adding a focus on Air Traffic Management
to publish and “market” their findings in relevant
and benchmarking) and enhancing the training of
outlets.
(graduate) students in the framework of a more
specialized program. Of special importance are
The 2nd workshop on major challenges of the
the contacts that were established with industry
South European air transport market brought stu- and institutional partners through the 2nd workdents and academics, especially from outside the shop on SEE air transport issues.
region, in closer contacts with practitioners from
industry and regulatory institutions from within
Follow up contacts
the region. An additional40 participants from
the aviation industry took part in this event and
Eric Tchouamou Njoya, University of Applied
helped to identify potential areas for joint research Sciences, [email protected];
and thesis topics for participating research students and researchers.
Radosav Jovanović, University of Belgrade
((UB-FTTE), [email protected]
•
44
IV. Publications
45
ITD Annual Report 2015/16
Publications by ITD
Members 2012-2014
Bass, Hans H., Weltwirtschaftskrise 1929 und
Große Rezession 2009: Lehren aus der Geschichte für die Wirtschaftspolitik von heute?, in:
Hans-Hermann Precht (Hrsg.), Weltwirtschaftskrisen und Strukturwandel, in: Schriftenreihe des
Wissenschaftlichen Beirats beim Nordwestdeutschen Museum für IndustrieKultur, Delmenhorst,
Heft 2, Bremen 2014 (forthcoming).
Bass, Hans H., The Euro Crisis and Macroeconomic Management in Africa, in: African Development Perspectives Yearbook, Vol. 16, 2014
(Ko-Autor: Hans-Hermann Steinbeck), pp. 105146.
Bass, Hans H., Interview: Sind Agrarspekulanten
Schuld am Hunger? Neue Studie eines Bremer
Wissenschaftlers legt negativen Einfluss auf Nahrungsmittelpreise nahe, Weser Kurier, 02.12.2013,
S. 21.
Bass, Hans H., Interview: „Ein Konsens ist nicht
notwendig“, Neues Deutschland, 29.11.2013, S. 8.
Bass, Hans H., Finanzmarktspekulation und Nahrungsmittelpreise: Anmerkungen zum Stand der
Forschung, Studie für Foodwatch e. V., Universität
Bremen: Materialien des Wissenschaftsschwerpunktes „Globalisierung der Weltwirtschaft“, Bd.
42 (herausgegeben von Andreas Knorr, Alfons
Lemper, Axel Sell und Karl Wohlmuth), 2013.
Bass, Hans H., Rezension von Arno Gahrmann,
Wir arbeiten und nicht das Geld. Wie wir unsere
Wirtschaft wieder lebenswert machen, Frankfurt
2013, in: Zeitschrift für Sozialökonomie, 50. Jg.,
178./179. Folge, 2013, S. 75-77.
Bass, Hans H. und Thanh Trung Nguyen, Motorisierter Verkehr auf Hanois Stadtstraßen: Vermeiden, verbessern, verlagern – aber wie?, in: Viet
Nam Kurier 1/2013, S. 5-11.
46
Bass, Hans H. und Steinbeck, Hans-Hermann, [Afrika im Sog der Euro-Krise; in russischer Sprache],
in: mir Perenem, Russian Academy of Sciences,
Institute for International Economic and Political
Studies, Moskau, No. 2 / 2013, pp. 89-94.
Bass, Hans H., Verkehrspolitik unter dem Druck
der Straße. Die Dortmunder Fahrpreisunruhen von
1971, in: Werkstatt Geschichte, hrsg. vom Verein
für kritische Geschichtsschreibung e.V., Nr. 61:
„geschichte und kritik“, 2013, S. 49-64.
Bass, Hans H., von Freyhold, Klaus und Weisskoeppel, Cordula, Water management and water
harvesting: How to overcome constraints in community gardening in semi-arid Mali, Proceedings
of the 2013 International Conference “Economic
Science for Rural Development”, Jelgava No. 31:
Integrated and Sustainable Regional Development, 2013, pp. 170-174; auch: http://nbn-resolving.de/urn:nbn:de:0168-ssoar-341370
Bass, Hans H., Editor: Promoting the Production of Cashew, Shea, and Indigenous Fruits in
West Africa, ITD Annual Report Supplement
2, 2013, http://nbn-resolving.de/urn:nbn:de:0168-ssoar-338461.
Bass, Hans H., African agriculture at the crossroads, in: Hans H. Bass (ed.), Promoting the Production of Cashew, Shea, and Indigenous Fruits
in West Africa, ITD Annual Report Supplement 2,
2013, pp. 3-5, http://nbn-resolving.de/urn:nbn:de:gbv:46-00103145-15.
Bass, Hans H., Assessing the potentials of processing nuts and fruits in Mali, in: Hans H. Bass (ed.),
Promoting the Production of Cashew, Shea, and
Indigenous Fruits in West Africa, ITD Annual Report Supplement 2, 2013, pp. 19-21, http://nbn-resolving.de/urn:nbn:de:gbv:46-00103145-15.
Bass, Hans H., Spekulation mit Nahrungsmitteln:
Wo steht die Wissenschaft?, Welthungerhilfe:
Standpunkt, April 2013.
ITD Annual Report 2015/16
Bass, Hans H. und Thanh Trung Nguyen, Verkehrsplanung: Staus in den Städten, in: Entwicklung
und Zusammenarbeit, April 2013, Print-Ausgabe
Nr. 4, 2013, S. 169-171.
Bass, Hans H. und Thanh Trung Nguyen, Traffic:
Imminent gridlock, in: Development and Cooperation, April 2013, Print Edition no. 4, 2013, p.
169-171.
Bass, Hans H. und Hans-Hermann Steinbeck,
Afrika im Sog der Euro-Krise, GIGA Focus Global,
Nr. 2, 2013, Hamburg: German Institute of Global
and Area Studies / Leibniz-Institut für Globale und
Regionale Studien.
Bass, Hans H., Soll die Agrarspekulation reingewaschen werden? Gastbeitrag, Der Tagesspiegel
vom 28.01.2013.
Bass, Hans H., Klaus von Freyhold und Cordula
Weisskoeppel, Wasser ernten, Bäume schützen.
Ernährungssicherung im Sahel, Forschungsbericht, Bremen: Institute for Transport and Development, 2013, http://nbn-resolving.de/urn:nbn:de:0168-ssoar-325187.
Bass, Hans H., Auf der Privatisierungsbremse, in:
The European 11.12.2012, http://www.theeuropean.de/hans-heinrich-bass/5597-rekommunalisierung-in-deutschen-kommunen
Bass, Hans H., Country Case Study Mali, in: Karl
Wohlmuth / Patrick M. Kormawa / Jean Devlin,
Agribusiness for Africa’s Prosperity: Country Case
Studies, Vienna: United Nations Industrial Development Organisation (UNIDO), Second revised
edition, April 2012, pp. 137-181, http://issuu.com/
unido/docs/¬aapcasestudies/1
Bass, Hans H., He thong van tai hanh khach noi do
tai Duc, 2010-2050: Nhung yeu to quyet dinh va
cac lua chon, in: H. Bass, Nguyen Thanh Trung und
Ly Huy Tuan (eds.), Huong toi cac he thong giao
thong do thi ben vung, Hanoi 2012, S. 65-92.
Bass, Hans H., Nguyen Thanh Trung und Ly Huy
Tuan (eds.), Huong toi cac he thong giao thong do
thi ben vung [Auf dem Weg zu nachhaltigen städtischen Verkehrssystemen], Doi thoai Viet-Duc ve
„Thanh pho cua tuong lai – Tuong lai cua thanh
pho“, Hanoi 2012.
Bass, Hans H., Welternährung in der Krise, GIGA
Focus Global, Nr. 5, 2012, Hamburg: German Institute of Global and Area Studies / Leibniz-Institut
für Globale und Regionale Studien.
Bass, Hans H., TV-Interview zum Thema „Nahrungsmittelspekulation“, 24. August 2012, 3sat,
Sendung nano, http://www.3sat.de/mediathek/
index.php?display=1&obj=32170 (4’32’’)
Bass, Hans H., Index speculation – A new challenge for world food security, in: Wyzwania
Gospodarki Globalnej. Challenges of the Global
Economy, Pracy i Materiały Institutu Handlu Zagranicznego, Nr. 31, Gdańsk: Uniwersytet
Gdański 2012, S. 719-728, auch: http://nbn-resolving.de/urn:nbn:de:0168-ssoar-341476.
Bass, Hans H., Brot für die Börse. Spekulationen
mit Nahrungsmitteln, in: Brockhaus Horizonte.
Essen ist Leben, F. A. Brockhaus, Gütersloh und
München 2012, S. 326-331.
Bass, Hans H., Die Agroindustrie wird Afrikas
Hunger nicht besiegen, ETH Zürich: Ökonomenstimme, www.oekonomenstimme.org/artikel/2012/04/die-agroindustrie-wird-afrikas-hunger-nicht-besiegen (30.04.2012)
Bass, Hans H., Green renaissance, not revolution, in: People and the Planet, www.peopleandplanet.net/?lid=30272&section=34&topic=27
(18.04.2012).
Bass, Hans H., Afrika braucht grüne Renaissance, nicht grüne Revolution, in: Entwicklung und
Zusammenarbeit, Sichere Ernährung, Nr. 3/2012,
S. 107-109.
47
ITD Annual Report 2015/16
Bass, Hans H., Green renaissance, not revolution,
in: Development and Cooperation, Food security,
Nr. 3/2012, S. 107-109.
Bass, Hans H., De la pertinence de la spéculation,
in: Rural 21. Le journal international du développement rural (08.03.2012).
Niemeier, Hans-Martin, Regulatory Aspects in the
Air Transport Industry, Air Transport Colloquium
- 4 December 2014, The European Aviation Business in 2014 and Beyond: How to turn Challenges
into Opportunities? University of Antwerp.
Niemeier, Hans-Martin, Reform of Air Navigation
Services Providers – Experiences and Next Steps
Forward” EUROCONTROL HQ, Brussels, November 10th 2014
Niemeier, Hans-Martin, Deployment of standardized ATC technology? – An Economists Perspective, 6th Florence Air Forum, „Making effective use
of technology in SESAR deployment“, 03.10.2014
Niemeier, Hans-Martin, Economic Assessment of
Investments in European Airports - A Survey; with
P. Forsyth and E. Njoya, ATRS World Conference
at Kedge Business School, Bordeaux, France, July
17-20 2014
Niemeier, Hans-Martin, Impacts of Passenger
Taxes in Aviation – A theoretical and empirical
analysis, with F. Fichert and P. Forsyh, Konferenz
„Verkehrsökonomie und –politik“, Berlin – 26. Juni
2014
Niemeier, Hans-Martin, The Effects of Air Transport on the Economy – How can we Evaluate
Them?“ German Aviation Research Society, 9 and
10 July 2014, University of Applied Sciences (UAS)
Bremen
Niemeier, Hans-Martin, The Permanently Failing
Organization: An Application to the Airline Industry in Eastern Europe, with Akbar, Y.; Németh, A.;
Journal of Air Transport Management 35 (2014)
1-11
48
Niemeier, Hans-Martin (Edited with M. W. Tretheway), Special Issue of the First European Aviation
Conference Re-Inventing the Aviation Value Chain
Nov 22-23, 2012, Journal of Air Transport Management, Volume 41, Pages 1-64 (October 2014)
Niemeier, Hans-Martin, Climate Change Mitigation Policies in Aviation, with F. Fichert and P.
Forsyth, GARS Workshop on Air transport and
Climate Change at Worms University of Applied
Sciences 4 April 2014
Niemeier, Hans-Martin, What Future Role for
Eurocontrol ?, Markets in Air Traffic Control and
the Evolving Role of Eurocontrol 5th Florence Air
Forum, 24 March 2014
Niemeier, Hans-Martin, What Roles and Responsibilities for the Key Actors in the Emerging ATC
Market? – An Economists Perspective, Markets in
Air Traffic Control and the Evolving Role of Eurocontrol, 5th Florence Air Forum, 24 March 2014
Niemeier, Hans-Martin, Economies of scale and
scope of airports – a critical survey, with Malte
Lechmann Journal of Air Transport Studies, Volume 4 - Number 2, Summer 2013, pp 1-25
Niemeier, Hans-Martin, Incentive Regulation of
Airports – An Economic Assessment, with Peter
Forsyth and Juergen Mueller ATRS 17th Annual
World Conference Bergamo Italy, June 26-29,
2013
Niemeier, Hans-Martin, Organizational Theory,
Strategy and „Permanent Failure“: Explaining Economic Outcomes in the Airline Industry, with Yusaf
H. Akbar and Adel Nemeth ATRS 17th Annual World Conference Bergamo Italy, June 26-29, 2013
Niemeier, Hans-Martin, Economic Assessment of
Airports and Air Transport Liberalisation, with Peter Forsyth and Eric Njoya ATRS 17th Annual World Conference Bergamo Italy, June 26-29, 2013
ITD Annual Report 2015/16
Niemeier, Hans-Martin, Economic Assessment of
Investments in European Airports –A Survey, with
Peter Forsyth and Eric Njoya, presented at The Effects of Air Transport on the Economy – How can
we Evaluate Them?, GARS & IATA Workshop June
20th and 21st 2013, Hogeschool van Amsterdam
Niemeier, Hans-Martin, A Survey of Empirical Research on the Productivity and Efficiency Measurement of Airports, with Vanessa Liebert, Journal
of Transport Economics and Policy, Volume 47,
Part 2, May 2013, pp. 157–189
Niemeier, Hans-Martin, Expanding Airport Capacity under Constraints in Large Urban Areas: The
German Experience, Roundtable on Expanding
Airport Capacity under Constraints in Large Urban
Areas, International Transport Forum/OECD, Discussion Paper No. 2013-4 Paris, 21-22 February,
2013
Niemeier, Hans-Martin, Airport charges at regional Airports with Savia Hasanova, Presentation given at the GARS Workshop “Assessing the
role of small regional airports”, Université Paris 1
Panthéon-Sorbonne, Paris, 05 February 2013
Niemeier, Hans-Martin, Liberalisation in Aviation
Competition, Cooperation and Public Policy, with
Peter Forsyth, Kai Hüschelrath, David Gillen, Hartmut Wolf (ed.), German Aviation Research Seminar Series No. 4, Ashgate Burlington, 2013
Niemeier, Hans-Martin, Introduction and Overview, with Peter Forsyth, David Gillen, Kai Hüschelrath and Hartmut Wolf, in Liberalisation in
Aviation Competition, Cooperation and Public
Policy, with Peter Forsyth, Kai Hüschelrath, David
Gillen, Hartmut Wolf (ed.), German Aviation Research Seminar Series No. 4, Ashgate Burlington,
2013
Niemeier, Hans-Martin, Competition Among
European Airlines – On the Role of Product Differentiation, with Karsten Fröhlich, in Liberalisation
in Aviation Competition, Cooperation and Public
Policy, with Peter Forsyth, Kai Hüschelrath, David
Gillen, Hartmut Wolf (ed.), German Aviation Research Seminar Series No. 4, Ashgate Burlington,
2013
Niemeier, Hans-Martin, An assessment of the
Success of Cross-border Airline Mergers and Acquisitions in Europe, with Martin Holtz, Julia Hellmers, Karsten Fröhlich, Adél Németh, Wolfgang
Grimme, in Liberalisation in Aviation Competition,
Cooperation and Public Policy, with Peter Forsyth,
Kai Hüschelrath, David Gillen, Hartmut Wolf (ed.),
German Aviation Research Seminar Series No. 4,
Ashgate Burlington, 2013
Niemeier, Hans-Martin, Airline Mergers in Europe – An Overview on the Market Definition of the
EU Commission, with Adel Nemeth, Journal of
Air Transport Management Volume 22, July 2012,
Pages 45-52
Niemeier, Hans-Martin, Competition between
airports and the need for airport regulation, Lecture given at the University of Applied Sciences
Worms, 6 December 2012
Niemeier, Hans-Martin, Luftverkehr und Klimawandel - 10 Thesen und Kommentare
zur Luftverkehrsteuer, Workshop der Friedrich-Ebert-Stiftung “Reformoptionen für die Verkehrsinfrastrukturfinanzierung und Verkehrspolitik in Deutschland“ Berlin, 5.12.2012
Niemeier, Hans-Martin, Incentive Regulation of
Airports – An Economic Assessment, with Peter
Forsyth and Juergen Mueller, paper given at the
5th Annual Conference on Competition and Regulation in Network Industries (CRNI), 30 November
2012 at the Residence Palace in Brussels
Niemeier, Hans-Martin, The Good, the Bad and
the Future: Economic Assessment of Airports
and Air Transport Liberalisation, with Peter Forsyth, presentation given at the GARS- Workshop
“Current Issues in Aviation” Workshop prior to the
European Aviation Conference, HWR Berlin, 21st
November 2012
49
ITD Annual Report 2015/16
Niemeier, Hans-Martin, How do airports compete?, Conference on Airports Competition, presentation given at the Faculty of Economics and
Business of the University of Barcelona, Barcelona, November 19, 2012
Niemeier, Hans-Martin, European Airport Reform:
Slots and the Implicit Contract between Airlines
and Airports, with Peter Forsyth, paper given at
the Kuhmo Nectar Conference, Berlin, June 21-22,
2012.
Niemeier, Hans-Martin, Vertical Structure of Air
Transport: A Transaction Cost Approach, Presentation given at GAB Final Workshop in Berlin on 20
6 2012, Berlin School of Economics and Law
Niemeier, Hans-Martin, Incentive Regulation of
European Airports – Success or Failure? Presentation given at the University of Auckland,28 March,
2012
Weisskoeppel, Cordula, von Freyhold, Klaus und
Bass, Hans H., Schrebergärtnern am Rande der
Wüste? Wege zur Ernährungssicherung im Sahel.
Ein Beispiel aus dem ländlichen Mali, in: Michael
Stiller und Michaela Grein, Faszination Afrika. Naturräume eines Kontinents, TenDenZen, Jahrbuch
des Überseemuseums Bremen, Bd. XIX, Bremen
2013, S. 29-40.
50
ITD Annual Report 2015/16
Graduation Theses
Supervised by ITD
Members
PhD Theses projects
Dill, Ulrich, Entwicklung von Industrie-Clustern
in Saudi-Arabien (Supervisor Prof. Dr. Wolfram
Elsner, University of Bremen; co-operating supervisor: Prof. Dr. Hans H. Bass, ITD).
Fröhlich, Karsten, Competition in Aviation Markets - A Spatial and Vertical Restraints Approach
(Supervisor Prof. Dr. Bernhard Wieland, Technical
University of Dresden; co-operating supervisor:
Prof. Dr. Hans-Martin Niemeier, ITD).
Kumar, Shravan, Supply Chain Integration Models Between India and Europe (Supervisor N.N.;
co-operating supervisor: Prof. Dr. Hans-Martin
Niemeier, ITD).
Ülkü, Tolga, Empirical analyses of airport efficiency and costs: Small regional airports and airport
groups in Europe (Supervisor Prof. Dr. Ulrich Kamecke, Humboldt University Berlin; co-operating
supervisor: Prof. Dr. Hans-Martin Niemeier, ITD.
Finished in 2014).
Yim, Il-Sop, Das Fremde als das Eigene: Entstehung der südkoreanischen Wirtschaftskultur
durch Fremdbestimmung (Supervisor Prof. Dr.
Heide Gerstenberger, University of Bremen; committee member: Prof. Dr. Hans H. Bass, ITD).
Meyer, Christian, Ökonomische Analyse der Europäischen Flugsicherung (Supervisor Prof. Dr.
Kay Mitusch, Karlsruhe Institute of Technology;
co-operating supervisor: Prof. Dr. Hans-Martin
Niemeier, ITD).
Nemeth, Adel, Efficiency Defense in/OF the EU
Merger Policy: Evidence on European Airline
Mergers (Supervisor Gert Brunekreeft, Jacobs
University Bremen; co-operating supervisor: Prof.
Dr. Hans-Martin Niemeier, ITD).
Njoya, Eric Tchouamou, Aviation, Tourism and Poverty in Kenya: A Dynamic Microsimulation CGE
Model Analysis (Supervisor Prof. Dr. Kay Mitusch,
Karlsruhe Institute of Technology; co-operating
supervisor: Prof. Dr. Hans-Martin Niemeier, ITD).
Paul, Annika, Analysis of Hub Airport Competition
(Supervisor Prof. Dr. Bernhard Wieland, Technical
University of Dresden; co-operating supervisor:
Prof. Dr. Hans-Martin Niemeier, ITD).
Sidi Ali, Rabi, Female Business Owners in Ghana’s
Tourism Sector (Supervisor Prof. Dr. Utz Dornberger, University of Leipzig; co-operating supervisor:
Prof. Dr. Hans H. Bass, ITD).
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ITD Annual Report 2015/16
Master Theses
Bachelor Theses
Griese, Simone Sonja, Privatisierung, Regulierung
und Wettbewerb des Kopenhagener Flughafens
– Eine Analyse, Bremen 2014 (Prof. Dr. Frank
Fichert, Co-Supervisor Prof. Dr. Hans-Martin Niemeier, ITD).
Barragan-Lastres, Maria Pia, Wirtschaftliche Integration in Lateinamerika: Stand und Perspektiven,
Bremen 2013 (Supervisor Prof. Dr. Hans H. Bass,
ITD).
Hundertmark, Michael, Marktstruktur, Markteintritte und ökonomische Ergebnisse auf Luftverkehrsstrecken, Bremen 2014 (Supervisor Prof. Dr.
Hans-Martin Niemeier, ITD).
Boob, Steffen, Auswirkung der diplomatischen
Konflikte zwischen der Volksrepublik China und
Japan auf die bilateralen Wirtschaftsbeziehungen,
Bremen 2012 (Supervisor Prof. Dr. Monika Schädler, Co-Supervisor Prof. Dr. Hans H. Bass, ITD).
Lerch, Irina, Konsequenzen aus der Kondratieff-Theorie für die aktuelle Wirtschaftspolitik,
Bremen 2014 (Supervisor Prof. Dr. Hans H. Bass,
ITD).
El Montasir Belmouaden, Ausländische Direktinvestitionen in Marokko, Bremen 2014 (Supervisor
Prof. Dr. Hans H. Bass, ITD; Co-Supervisor Eric
Njoya, ITD).
Oestmann, Boris, Quantifying Prediction Errors
Induced by Anti-Cartel Policy in the Air Cargo
Industry, Bremen 2013 (Supervisor Prof. Dr. Kai
Hüschelrath, Co-Supervisor Prof. Dr. Hans-Martin
Niemeier, ITD).
Ennajem, Rebecca, Die kommunalen Handlungsmöglichkeiten bei der Nutzung von Windenergie
in Deutschland, Bremen 2013 (Supervisor Prof. Dr.
Hans-Martin Niemeier, ITD).
Wagner, Andrei, Benchmarking Analysis of the
Baltic States’ Biggest Airports Riga International
Airport and Lennart Meri Tallinn Airport in Context of Selected Airports in the Baltic Sea Region
(Tolga Ülkü, Co-Supervisor Prof. Dr. Hans-Martin
Niemeier, ITD).
Hang Nhut Anh, Deutsche Direktinvestitionen
in Vietnam: Perspektiven und Relevanz, Bremen
2012 (Supervisor Prof. Dr. Hans H. Bass, ITD).
Hankel, Alexander, Wirtschaftspolitische Ansätze
zur Lösung der Wirtschaftskrise in ausgewählten
europäischen Ländern seit 2009, Bremen 2013
(Supervisor Prof. Dr. Hans H. Bass, ITD).
Hase, Sven, Eastern Siberia-Pacific Ocean Pipeline – Russisches Erdöl als tragende Kraft einer
Partnerschaft, Bremen 2012 (Supervisor Prof. Dr.
Monika Schädler, Co-Supervisor Prof. Dr. Hans H.
Bass, ITD).
Hoang, Thu Hong, Vertical Size of Airport Firms in
Europe especially United Kingdom, France, Germany and Italy, Bremen 2013 (Supervisor Prof. Dr.
Hans-Martin Niemeier, ITD).
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ITD Annual Report 2015/16
Janssen, Jörg, Die Aussagefähigkeit von Länderratings für die Beurteilung der Performanz von
Volkswirtschaften am Beispiel Kenias, Bremen
2014 (Supervisor Prof. Dr. Hans H. Bass, ITD).
Rosenberg, Miriam, Wirtschaftliche Charakteristika und Potentiale der BRICS-Staaten unter besonderer Berücksichtigung Südafrikas, Bremen 2013
(Supervisor Prof. Dr. Hans H. Bass, ITD).
Klaus, Christina, Der potentielle Beitrag einer
standortgerechten Landwirtschaft zur nachholenden wirtschaftlichen und politischen Entwicklung
in Palästina, Bremen 2012 (Supervisor Prof. Dr.
Hans H. Bass, ITD, Co-supervisor Dr. Klaus von
Feyhold, ITD).
Rohrssen, Jens Finanztransaktionssteuer, mögliche Effekte und Auswirkungen. Das Fallbeispiel Europa, Bremen 2012 (Supervisor Prof. Dr.
Hans-Martin Niemeier, ITD)
Klindt, Niels, The Aircraft Leasing Market – An
Industrial Organization Analysis, Bremen 2014
(Supervisor Prof. Dr. Hans-Martin Niemeier, ITD).
Lerch, Irina, Die Rolle des privaten Sektors für
wirtschaftliche Innovation in der Russischen Föderation, Bremen 2011 (Supervisor Prof. Dr. Hans
H. Bass, ITD).
Mader, Christine, Fair Trade – mehr als eine Nische?, Bremen 2011 (Supervisor Prof. Dr. Hans H.
Bass, ITD).
Moskalik, Olga, Markteintrittsstrategien deutscher Unternehmen in Schwellenländern, Bremen
2011 (Supervisor Prof. Dr. Hans H. Bass, ITD).
Rummeny, Lutz, Mögliche Maßnahmen und Regulierungen zur Begrenzung von Spekulationen auf
Agrarrohstoffmärkten, Bremen 2011 (Supervisor
Prof. Dr. Hans H. Bass, ITD).
Schranz, Sebastian, Theorie und Empirie der City
Maut, Bremen 2012 (Supervisor Prof. Dr. Hans H.
Bass, ITD).
Smykalla, Julian, The Innovation Capability of
SME in Namibia, Bremen 2013 (Supervisor Prof.
Dr. Hans H. Bass, ITD).
Weber, Natalie, Strategic Airline Alliances and Air
Service Agreements in the Asian Pacific Region,
Bremen 2013 (Supervisor Prof. Dr. Hans-Martin
Niemeier, ITD).
Omafodezi, Lilian, Industrial and Innovation Policy
in Nigeria, Bremen 2013 (Supervisor Prof. Dr.
Hans H. Bass, ITD).
Pechstein, Jan, Organisationsmodell eines Zertifikathandelssystems für Luftfahrt-Biokraftstoff auf
‚Book and Claim’-Basis mit Er-haltung seiner Anrechenbarkeit im Emissionshandel, Bremen 2013
(Supervisor Prof. Dr. Hans-Martin Niemeier, ITD).
53
Impressum
Herausgeber: H.-H. Bass und H.-M. Niemeier
Hochschule Bremen
Werderstraße 73
28199 Bremen, Germany
Fakultät Wirtschaftswissenschaften
Institute for Transport and Development
Design: Tatjana Erlewein
Bremen 2015
ISSN 2191-4753
→ www.hs-bremen.de

Ds: カズ滝沢 Vo：ルーク水野 Fid：ボビー西 EG

Letter of Acceptance/Invitation/Confirmation for FY2015

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