The ribbon cutting effect is the desire of politicians to improve the public transport system by very showy, headline-grabbing augmentations (usually physical infrastructure) rather than much cheaper, often very mundane and less beneficial in themselves (but cumulatively powerful) service or navigability improvements. These latter improvements have little or no physical manifestation that the politician can ‘cut the ribbon’ on.

What causes or influences it?

Politicians are driven by the own re-election, and by the perceived short attention spans of voters and limited time in the media, hence the desire to build monuments to themselves that are easy to explain to the voters. Any other improvement to a public transport service become, in the words of the Yes Minister comedy program, ‘courageous’ for the politician.

TGVs of course make a real difference to passenger demand and travel times on the routes they serve and are welcomed by this author. But it is also recognised they are an integral part of French geopolitics (with countries from Morocco to Argentina buying TGV systems) and national political strategy, and headlines like the recent world rail speed record on the Est line are not intended merely for passenger consumption alone. Source wikipedia.

What impacts does it have on service efficiency?

Poor decisions result from the ribbon cutting effect, and can lead to improvement A, which costs the same as improvement B but delivers less benefit, getting the go-ahead. Or improvement C, which delivers no real improvement at all, or even harms the system, getting the go-ahead. Or improvement D, which may deliver benefits to society overall (for example, a large national monument) but delivers no direct improvement to the system. And all these projects come with the opportunity cost of what might have been done with the money. As construction and asset inflation make projects more expensive, the consequences of misallocation become greater.

What impact does it have on passenger demand?

Misallocation in improvements is usually associated with the other misallocation of staff or other resources, and can engender the wrong types of demand response. For example, building peak express infrastructure on rail lines rewards peak travel and consolidates gradient effects. Busways can physically remove the bus from the city streets (its natural home and competitive advantage) and make it further from its natural pedshed and thus result in longer end-to-end journey times, offsetting any speed benefit from the busway. This clearly negatively impacts on demand.

This is not an argument against some of these types of infrastructure improvement; only that the infrastructure improvement needs to be only the tip of an iceberg of ‘hard’ and ‘soft’ improvements to the system, from bus frequencies at rail stations, correct farebox policies, seamless interchange to gain ‘network effects’, passenger information and navigability for casual or non-users, to name a few soft improvements.

Australian examples

There are unfortunately too many Australian examples to name, which is regrettable in an overall environment of constrained spending. There is a predilection for odd-numbered track patterns, which reward expensive and irregular peak services, a predilection for giant rail stations (as if people travelled to hang around at stations), and for bus ‘interchanges’ when what people really want, is to not have to wait long for the next bus.

Melbourne’s City Loop, for example, is probably the worst example of resource misallocation in urban rail infrastructure in Australia in recent decades. As posted on my blog, there were a range of ‘soft’ and minor ‘hard’ problems that faced trains at Flinders Street station in the 1960s and 70s, that could have been much more easily and cheaply addressed than in fact occurred through the construction of the City Loop.

This is not to say that some people have not benefited from having stations at Melbourne Central, Parliament and Flagstaff, only that such a service could have been provided far cheaper than the City Loop ended up costing, and the Flinders St issues had cheaper, simpler cures.

Overseas examples.
Comparing the French and German high speed networks indicates that the French spend far more on each line, to gain headlines (for example, Lille to Marseille in 3 hours for 1000km). However, this came at the expense of seamless interchange between trains, which uses the network effect to provide semi-high-speed services to hundreds of cities in Germany, rather than simply the dozens that can be accessed via  French high speed routes.

The French also tend to build connection lines (for example, the circum-Paris line) to allow single-seat journeys, reflecting a lack of confidence in passengers changing trains to maximise the value of the high speed investment.

This potentially results from French politicians’ delusions of their global importance, as well as the desire to cement Paris as the capital, as distinct from the calmer, more even German approach.

Related concepts
navigability, gradient effect, seamless interchange, median wait time, single seat journey, passenger information display, network effects, bus-rail interchange, pedsheds, farebox policies, odd-numbered track amplification, true end-to-end journey time.