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

Author

Listed:
  • Vincent Bignon

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

  • Rui Esteves
  • Alfonso Herranz Loncan

Abstract

"Railways were one of the main growth engines of Latin American economies during the first globalization boom. At the time economic growth largely depended on export expansion and this, in turn, was closely associated to railway construction. However, railway investment required consistent government support in the form of subsidies, which were highly dependent on government revenues. As government revenues were mostly driven by tariffs on trade, this led to a potential multiple equilibria system. Some Latin American countries seem to have got trapped in a low level equilibrium in which the economy and government revenues did not grow enough due to insufficient railway development, and railway construction was stunted by the scarcity of public resources. The aim of this paper is to test the existence of the bidirectional causality link between government revenues and railway development. Our findings support the hypothesis of a positive two-way relationship between exports and government revenues, on the one hand, and of revenues and railway development, on the other. In an export-led growth context, this positive two-way relationship is consistent with a “big push” theory of Latin American growth before 1914. Our results are also informative of the growing divergence between economies of the region during this period."
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Vincent Bignon & Rui Esteves & Alfonso Herranz Loncan, 2015. "Big Push or Big Grab? Railways, Government Activism and Export Growth In Latin America, 1865-1913," Post-Print hal-01410632, HAL.
    • Handle: RePEc:hal:journl:hal-01410632
    as

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    Cited by:

    1. Vincent Bignon & Cecilia Garcia-Pe alosa, 2018. "The Toll of Tariffs: Protectionism, Education and Fertility in Late 19th Century France," Working papers 690, Banque de France.
    2. Bogart, Dan, 2022. "Infrastructure and institutions: Lessons from history," Regional Science and Urban Economics, Elsevier, vol. 94(C).
    3. Vincent Bignon & Cecilia Garcia-Peñalosa, 2017. "The long-term cost of protectionism for education," Rue de la Banque, Banque de France, issue 47, september.
    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.

    More about this item

    JEL classification:

    • N00 - Economic History - - General - - - General

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