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


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


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. repec:bfr:rueban:2017:47 is not listed on IDEAS
    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.

    More about this item


    Railways; Latin America; Export growth; Government revenues.;

    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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