Details of a similar aspiration: Privatized railroad in Argentina, deregulated railroad in the USA

This paper provides a comparative analysis of the introduction and outcomes of more “market friendly” reforms in Argentina and the United States. Finding several similarities in the early development of the railroad industry in Argentina and in the United States, it continues to provide a detailed review of railroad performance in each country and explains the underlying differences supporting this divergence. Deregulation in the U.S. allowed railroads to recover from near bankruptcy. Nearly every economic variable in the industry indicates that railroads have improved their operations, are more competitive, and are attaining higher levels of financial strength. Privatization of the industry in Argentina yields mixed results. Argentine railroads have been able to improve their operations, increase productivity but are still far from reaching long-term sustainability. Evidence uncovered by this paper suggests that privatization is not a silver bullet for railroad revitalization without a clear transportation policy and the willingness of the government to infuse financial support for infrastructure rehabilitation. The paper concludes by providing several policy alternatives for railroads in the United States and Argentina.