The recent reform of local public transport in Italy establishes that public subsidies should be capped in order to increase X-efficiency of an industry characterised, in the last two decades, by soft budget constraints and declining effectiveness (i.e. the share of people using private cars has...

The paper focuses on the market for local public transport in Italy, which was characterised, in the last two decades, by soft budget constraints and declining effectiveness (i.e. the share of people using private cars has increased dramatically). The paper also focuses on some features of the...