The Erie Canal was a mammoth public works project undertaken largely because the scope of the investment was beyond what a private firm could manage during the early 19th century. As with most public works, there were ample opportunities for public officials to realize private gains from the effort, and many did. On the whole, however, the construction of the Erie Canal (and most other major public works projects of the era) appears to have been well conceived and executed; it not only paid off more than its costs through tolls, but also generated substantial welfare improvements for the residents of the state of New York in the form of producer and consumer surplus and a wide range of positive externalities. Although there was obviously some fraud and mismanagement, the public authorities carried out the work at costs relatively close to those projected at the point of authorization. In an effort to try to place this episode in a broader perspective, we compare the ratio of actual expenditures on construction relative to the estimated costs at the time of authorization for the Erie Canal, to those for a range of other public works over American history up to the present day. It is our contention that this measure, albeit quite narrow in focus, is informative about the quality of governance of public resources. We highlight how, by this standard, the governance of public resources during the canal era stands up well in comparison with what we have seen since. Indeed, the cost overrun ratios have risen sharply over the last half-century, coinciding with both a marked increase in the relative size of the government sector as well as sustained economic growth. These patterns suggest how important it is that better measures and other means of systematically studying how the prevalence and effects of corruption vary across different contexts be developed.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Publisher Info
Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
10965.
Length: Date of creation: Dec 2004 Date of revision: Publication status: published relationship to a non-chapter. This should not happen. Please contact NBER. Handle: RePEc:nbr:nberwo:10965
Note: DAE Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A. Phone: 617-868-3900 Email: Web page: http://www.nber.org More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: ().
Related research
Keywords:
Other versions of this item:
Find related papers by JEL classification: N10 - Economic History - - Macroeconomics and Monetary Economics; Growth and Fluctuations - - - General, International, or Comparative H4 - Public Economics - - Publicly Provided Goods O1 - Economic Development, Technological Change, and Growth - - Economic Development O2 - Economic Development, Technological Change, and Growth - - Development Planning and Policy
This paper has been announced in the following NEP Reports:
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Andrei Shleifer & Robert W. Vishny, 1993.
"Corruption,"
NBER Working Papers
4372, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Other versions: