ABSTRACT
This chapter examines the economic arguments about the role of railways. It looks at the changes in rail usage in international transport and finally at the way in which attempts at revitalizing railways may have differential effects on the distribution of economic activity. The chapter focuses on experiences in the European Union, a focus which can be justified on two main grounds. European countries are typically smaller and face more border challenges than in many other parts of the world, but have a highly developed and dense network of rail services; and, through the European Union, have a clear objective and mechanism to develop a greater degree of cross-border integration. Nevertheless there is a view that transport is a means by which borders can be reduced in significance and economic space unified. The historical juxtaposition of the development of railways and the industrial revolution led to a natural conclusion that railways were a decisive factor.
