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Big Push or Big Grab? Railways, Government Activism and Export Growth in Latin America, 1865-1913

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  • Bignon, V.
  • Esteves, R.
  • Herranz-Loncán, A.

Abstract

Railways were one of the main engines of the Latin American trade boom before 1914. Railway construction often required financial support from local governments, which depended on their fiscal capacity. But since the main government revenues were trade-related, this generated a two-way feedback between government revenues and railways with a potential for multiple equilibria. The empirical tests in this paper support the hypothesis of a positive two-way relationship. The main implication of our analysis is that the build-up of state capacity was a necessary condition for railway expansion and, given the importance of the export sector in these economies, for economic growth and divergence in the region.

Suggested Citation

  • Bignon, V. & Esteves, R. & Herranz-Loncán, A., 2013. "Big Push or Big Grab? Railways, Government Activism and Export Growth in Latin America, 1865-1913," Working papers 447, Banque de France.
    • Handle: RePEc:bfr:banfra:447
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    Cited by:

    1. Vincent Bignon & Cecilia Garcia-Peñalosa, 2018. "The Toll of Tariffs: Protectionism, Education and Fertility in Late 19th Century France," Working papers 690, Banque de France.
    2. Vincent Bignon & Cecilia Garcia-Peñalosa, 2017. "The long-term cost of protectionism for education," Rue de la Banque, Banque de France, issue 47, september.
    3. Bogart, Dan, 2022. "Infrastructure and institutions: Lessons from history," Regional Science and Urban Economics, Elsevier, vol. 94(C).
    4. Nicola Pontarollo & Roberto Ricciuti, 2020. "Railways and manufacturing productivity in Italy after unification," Journal of Regional Science, Wiley Blackwell, vol. 60(4), pages 775-800, September.

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    More about this item

    Keywords

    Railways; Latin America; Export growth; Government revenues.;
    All these keywords.

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • N46 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Latin America; Caribbean
    • N76 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Latin America; Caribbean
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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