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Transportation Technology and Economic Change: The Impact of Colonial Railroads on City Growth in Africa

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  • Remi Jedwab
  • Alexander Moradi

Abstract

What 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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File URL: http://www.csae.ox.ac.uk/workingpapers/pdfs/csae-wps-2013-17.pdf
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Bibliographic Info

Paper provided by Centre for the Study of African Economies, University of Oxford in its series CSAE Working Paper Series with number 2013-17.

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Date of creation: 2013
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Handle: RePEc:csa:wpaper:2013-17

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Keywords: Transportation Technology; Development; Path Dependence; Growth;

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References

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  1. Elise Huillery, 2013. "The Black Man's Burden - The Cost of Colonization of French West Africa," Sciences Po publications info:hdl:2441/7o52iohb7k6, Sciences Po.
  2. Vernon Henderson & Adam Storeygard & David N. Weil, 2009. "Measuring Economic Growth from Outer Space," Working Papers 2009-8, Brown University, Department of Economics.
  3. Robin Burgess & Remi Jedwab & Edward Miguel & Ameet Morjaria & Gerard Padro i Miquel, 2013. "The Value of Democracy: Evidence from Road Building in Kenya," STICERD - Economic Organisation and Public Policy Discussion Papers Series 45, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
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Cited by:
  1. Stephen J. Redding & Matthew A. Turner, 2014. "Transportation Costs and the Spatial Organization of Economic Activity," NBER Working Papers 20235, National Bureau of Economic Research, Inc.

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