Abstract: The Political Economy of the Channel Tunnel: An International Business-Government Perspective
The promotion of and investment in the Channel Tunnel was a challenging multinational affair drawing in institutions from several countries. In this paper, I concentrate on the promotion of the abortive tunnel project of 1957-1975 and the ultimately successful venture a decade later, focusing on governments and companies in Britain, France, the United States, and Japan. I identify the management and sharing of risk as the critical elements in the Tunnel's political economy. Here, the difficulties produced by the "quadripartite quilt" of negotiations involving two governments (Britain and France) and two tunnel companies are at center stage, though I also argue that American involvement was important in the first project, and Japanese financial support was critical in the second. The debates concerned the type of crossing, questions of ownership versus licensing and regulation, and the importance of making public investment in related and supporting infrastructure. The Channel Tunnel has significance as a prototype of public-private partnership in Britain, and I draw lessons from the experience, referring in particular to the challenges presented by the "infrastructure project circle."