Transportation Technology and Economic Change: The Impact of Colonial Railroads on City Growth in Africa
AbstractWhat is the impact of modern transportation technology on long-run economic change in poor countries with high trade costs? Rail construction in colonial Sub-Saharan Africa provides a natural experiment: 90% of African railroad lines were built before independence, in a context where headloading was the dominant transportation technology. Using new data on railroads and cities over one century within one country, Ghana, and Africa as a whole, we find large permanent effects of transportation technology on economic development. First, colonial railroads had strong effects on commercial agriculture and urban growth before independence. We exploit various identification strategies to ensure these effects are causal. Second, using the fact that African railroads fell largely out of use post-independence, due to mismanagement and lack of maintenance, we show that colonial railroads had a persistent impact on cities. While colonial sunk investments (e.g., schools, hospitals and roads) partly contributed to urban path dependence, evidence suggests that railroad cities persisted because their early emergence served as a mechanism to coordinate contemporary investments for each subsequent period. Railroad cities are also wealthier than non-railroad cities of similar sizes today. This suggests a world where shocks to economic geography can trigger an equilibrium in which cities will emerge to facilitate the accumulation of factors, and thus have long-term effects on economic growth.
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Bibliographic InfoPaper provided by Centre for the Study of African Economies, University of Oxford in its series CSAE Working Paper Series with number 2013-17.
Date of creation: 2013
Date of revision:
Transportation Technology; Development; Path Dependence; Growth;
Find related papers by JEL classification:
- R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Systems
- R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
- O3 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights
- N97 - Economic History - - Regional and Urban History - - - Africa; Oceania
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-11-09 (All new papers)
- NEP-GEO-2013-11-09 (Economic Geography)
- NEP-HIS-2013-11-09 (Business, Economic & Financial History)
- NEP-TRE-2013-11-09 (Transport Economics)
- NEP-URE-2013-11-09 (Urban & Real Estate Economics)
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