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TRANSPORT TECHNOLOGY AND ECONOMIC EXPANSION: THE GROWTH CONTRIBUTION OF RAILWAYS IN LATIN AMERICA BEFORE 1914*

  • Alfonso Herranz-Loncán (a1)
Abstract
ABSTRACT

This paper measures the direct contribution of railways to economic growth before 1914 in four Latin American economies with large railway systems (Argentina, Brazil, Mexico and Uruguay) using growth accounting techniques. The outcomes of the analysis indicate that the growth contribution of railways in Uruguay was very low. By contrast, in Argentina and Mexico railways provided huge benefits, amounting to 20-25% of income per capita growth before 1914. Finally, in Brazil, the growth contribution of railways was even higher, although this was largely a consequence of the stagnation of the Brazilian economy. These results provide an example of a technology whose growth contribution was much higher in some peripheral economies than in the core countries where it was developed.

RESUMEN

En este artículo se estima, aplicando las técnicas de contabilidad del crecimiento, la contribución directa de los ferrocarriles al crecimiento económico, antes de 1914, de cuatro economías latinoamericanas con sistemas ferroviarios muy desarrollados (Argentina, Brasil, México y Uruguay). Los resultados del análisis indican que la contribución directa de los ferrocarriles al crecimiento económico uruguayo fue muy baja. En cambio, los ferrocarriles proporcionaron a Argentina y México unos beneficios directos de enorme magnitud, que representaron entre el 20% y el 25% del crecimiento de la renta per cápita de esos países antes de 1914. Finalmente, la contribución de los ferrocarriles brasileños al crecimiento económico fue todavía mayor, aunque ello fue en gran medida consecuencia del estancamiento de la economía brasileña. Estos resultados ofrecen un ejemplo de una tecnología cuya contribución al crecimiento fue mucho mayor en algunas economías periféricas que en los países industrializados en los que esa tecnología se desarrolló.

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This research has been financed by the Spanish Ministry of Science and Innovation project ECO2012-39169-C03-03. I thank Sandra Kuntz, Paolo Riguzzi and the participants at the I Encuentro de la AEHE, the XXVI Jornadas of the Banco Central del Uruguay, the 2011 Carlos III FRESH Meeting and the 9th EHES Conference for their comments and help. They are not responsible for any mistakes in the paper.

Footnotes
References
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J. H. Boyd G. M. Walton (1972): «The Social Savings from Nineteenth-Century Rail Passenger Services». Explorations in Economic History, 9 (3), pp. 233-254.

N. F. R. Crafts (2004b): «Steam as a General Purpose Technology: A Growth Accounting Perspective». Economic Journal, 114 (495), pp. 338-351.

R. Dobado G. A. Marrero (2005): «Corn Market Integration in Porfirian Mexico». Journal of Economic History, 65 (1), pp. 103-128.

A. Herranz-Loncán (2006): «Railroad Impact in Backward Economies: Spain, 1850-1913». Journal of Economic History, 66 (4), pp. 853-881.

A. Herranz-Loncán (2011b): «The Role of Railways in Export-Led Growth: the Case of Uruguay, 1870-1913». Economic History of Developing Regions, 26 (2), pp. 1-32.

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T. Leunig (2010): «Social Savings». Journal of Economic Surveys, 24 (5), pp. 775-800.

A. Maddison (2001): The World Economy: A Millennial Perspective. Paris: OECD.

J. Metzer (1984): «Railroads and the Efficiency of Internal Markets: Some Conceptual and Practical Considerations». Economic Development and Cultural Change, 33 (1), pp. 61-70.

W. R. Summerhill (2005): «Big Social Savings in a Small Laggard Economy: Railroad-Led Growth in Brazil». Journal of Economic History, 65 (1), pp. 72-102.

W. R. Summerhill (2006): «The Development of Infrastructure», in V. Bulmer-Thomas, J. Coatsworth and R. Cortés Conde (eds), The Cambridge Economic History of Latin America. Vol. 2: The Long Twentieth Century. Cambridge: Cambridge University Press, pp. 293-326.

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Revista de Historia Economica - Journal of Iberian and Latin American Economic History
  • ISSN: 0212-6109
  • EISSN: 2041-3335
  • URL: /core/journals/revista-de-historia-economica-journal-of-iberian-and-latin-american-economic-history
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