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Without coal in the age of steam and dams in the age of electricity: an explanation for the failure of Portugal to industrialize before the Second World War

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  • Sofia Teives Henriques

    (Lund University)

  • Paul Sharp

    (University of Southern Denmark, CAGE, CEPR)

Abstract

We provide a natural resource explanation for the divergence of the Portuguese economy relative to other European countries before the Second World War, based on a considerable body of contemporary sources. First, we demonstrate that a lack of domestic resources meant that Portugal experienced limited and unbalanced growth during the age of steam. Imports of coal were prohibitively expensive for inland areas, which failed to industrialize. Coastal areas developed through steam, but were constrained by limited demand from the interior. Second, we show that after the First World War, when other coal-poor countries turned to hydro-power, Portugal relied on coal-based thermal-power, creating a vicious circle of high energy prices and labor-intensive industrialization. We argue that this was the result of (i) water resources which were relatively expensive to exploit; and (ii) path-dependency, whereby the failure to develop earlier meant that there was a lack of capital and demand from industry.

Suggested Citation

  • Sofia Teives Henriques & Paul Sharp, 2019. "Without coal in the age of steam and dams in the age of electricity: an explanation for the failure of Portugal to industrialize before the Second World War," Working Papers 0148, European Historical Economics Society (EHES).
  • Handle: RePEc:hes:wpaper:0148
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    References listed on IDEAS

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    1. Sofia Teives Henriques & Paul Sharp, 2016. "The Danish agricultural revolution in an energy perspective: a case of development with few domestic energy sources," Economic History Review, Economic History Society, vol. 69(3), pages 844-869, August.
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    Cited by:

    1. Laura Felício & Sofia T. Henriques & André Serrenho & Tiago Domingos & Tânia Sousa, 2019. "Insights from Past Trends in Exergy Efficiency and Carbon Intensity of Electricity: Portugal, 1900–2014," Energies, MDPI, vol. 12(3), pages 1-22, February.
    2. Kristin Ranestad & Paul Richard Sharp, 2020. "Success through failure? Four Centuries of Searching for Danish Coal," Working Papers 0183, European Historical Economics Society (EHES).

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    More about this item

    Keywords

    Industrial Revolution; natural resources; coal; electrification; energy prices;
    All these keywords.

    JEL classification:

    • N1 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations
    • N5 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries
    • N7 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

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