IDEAS home Printed from https://ideas.repec.org/p/oec/itfaab/2011-4-en.html
   My bibliography  Save this paper

Cart or Horse: Transport and Economic Growth

Author

Listed:
  • Tim Leunig

    (London School of Economics)

Abstract

This paper argues that transport is more cart than horse, in that transport improvements are not the most important driver of economic growth for most countries. Nevertheless there are circumstances in which transport is particularly important. Big transport breakthroughs – such as replacing walking with railways, or creating a highways network for the first time – do have big effects, but these are unlikely to be seen again in developed economies. Instead transport in developed economies is best seen as having a supporting role. If it is neglected, it can constrain growth, as congestion and unreliable transport systems can exact a heavy price. But as long as the transport system is “good enough”, the returns to greater transport investment will be relatively limited.

Suggested Citation

  • Tim Leunig, 2011. "Cart or Horse: Transport and Economic Growth," International Transport Forum Discussion Papers 2011/4, OECD Publishing.
    • Handle: RePEc:oec:itfaab:2011/4-en
    DOI: 10.1787/5kg9mq4ws027-en
    as

    Download full text from publisher

    File URL: https://doi.org/10.1787/5kg9mq4ws027-en
    Download Restriction: no
    File URL: https://libkey.io/10.1787/5kg9mq4ws027-en?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Harald Badinger, 2005. "Growth Effects of Economic Integration: Evidence from the EU Member States," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 141(1), pages 50-78, April.
    2. Robert J. Barro, 2013. "Inflation and Economic Growth," Annals of Economics and Finance, Society for AEF, vol. 14(1), pages 121-144, May.
    3. Christophe Kamps, 2005. "The Dynamic Effects of Public Capital: VAR Evidence for 22 OECD Countries," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 12(4), pages 533-558, August.
    4. Martinez-Galarraga, Julio, 2012. "The determinants of industrial location in Spain, 1856–1929," Explorations in Economic History, Elsevier, vol. 49(2), pages 255-275.
    5. Haaland, J.I. & Kind, H.J. & knarvik, K.H.M. & Torstensson, J., 1998. "What Determines the Economic Geography of Europe?," Papers 19/98, Norwegian School of Economics and Business Administration-.
    6. Leunig, Timothy, 2006. "Time is Money: A Re-Assessment of the Passenger Social Savings from Victorian British Railways," The Journal of Economic History, Cambridge University Press, vol. 66(3), pages 635-673, September.
    7. Tim Leunig, 2010. "Social Savings," Journal of Economic Surveys, Wiley Blackwell, vol. 24(5), pages 775-800, December.
    8. Rice, Patricia & Venables, Anthony J. & Patacchini, Eleonora, 2006. "Spatial determinants of productivity: Analysis for the regions of Great Britain," Regional Science and Urban Economics, Elsevier, vol. 36(6), pages 727-752, November.
    9. Philippe Aghion & Mark Schankerman, 2004. "On the welfare effects and political economy of competition-enhancing policies," Economic Journal, Royal Economic Society, vol. 114(498), pages 800-824, October.
    10. Crafts, Nicholas, 2004. "Social savings as a measure of the contribution of a new technology to economic growth," Economic History Working Papers 22554, London School of Economics and Political Science, Department of Economic History.
    11. Summerhill, William R., 2005. "Big Social Savings in a Small Laggard Economy: Railroad-Led Growth in Brazil," The Journal of Economic History, Cambridge University Press, vol. 65(1), pages 72-102, March.
    12. Nicholas Crafts & Abay Mulatu, 2005. "What explains the location of industry in Britain, 1871–1931?," Journal of Economic Geography, Oxford University Press, vol. 5(4), pages 499-518, August.
    13. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 177-200, March.
    14. Crafts, Nicholas & Mulatu, Abay, 2006. "How Did the Location of Industry Respond to Falling Transport Costs in Britain Before World War I?," The Journal of Economic History, Cambridge University Press, vol. 66(3), pages 575-607, September.
    15. Joshua J. Lewer & Hendrik Van den Berg, 2003. "How Large Is International Trade’s Effect on Economic Growth?," Journal of Economic Surveys, Wiley Blackwell, vol. 17(3), pages 363-396, July.
    16. John G. Fernald, 1999. "Roads to Prosperity? Assessing the Link between Public Capital and Productivity," American Economic Review, American Economic Association, vol. 89(3), pages 619-638, June.
    17. Venables, Anthony, 1996. "Lecture Notes on International Trade and Imperfect Competition," Working Paper Series 463, Research Institute of Industrial Economics.
    18. Metzer, Jacob, 1976. "Railroads in Tsarist Russia: Direct gains and implications," Explorations in Economic History, Elsevier, vol. 13(1), pages 85-111, January.
    19. N. F. R. Crafts & C. Knick Harley, 2002. "Precocious British Industrialization: A General Equilibrium Perspective," University of Western Ontario, Departmental Research Report Series 200213, University of Western Ontario, Department of Economics.
    20. Jacobs, Jane, 1969. "Strategies for Helping Cities," American Economic Review, American Economic Association, vol. 59(4), pages 652-656, Part I Se.
    21. Sergio Destefanis & Vania Sena, 2005. "Public capital and total factor productivity: New evidence from the Italian regions, 1970-98," Regional Studies, Taylor & Francis Journals, vol. 39(5), pages 603-617.
    22. Philippe Aghion & Peter Howitt, 1997. "Endogenous Growth Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011662, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tim Leunig, 2010. "Social Savings," Journal of Economic Surveys, Wiley Blackwell, vol. 24(5), pages 775-800, December.
    2. Valter Di Giacinto & Giacinto Micucci & Pasqualino Montanaro, 2012. "The Macroeconomic Impact of Infrastructures: A Literature Review and Empirical Analysis on the Case of Italy," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 1, March.
    3. Berger, Thor, 2019. "Railroads and Rural Industrialization: evidence from a Historical Policy Experiment," Explorations in Economic History, Elsevier, vol. 74(C).
    4. Ward Romp & Jakob De Haan, 2007. "Public Capital and Economic Growth: A Critical Survey," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 8(S1), pages 6-52, April.
    5. Mitra, Arup & Sharma, Chandan & Véganzonès-Varoudakis, Marie-Ange, 2014. "Trade liberalization, technology transfer, and firms’ productive performance: The case of Indian manufacturing," Journal of Asian Economics, Elsevier, vol. 33(C), pages 1-15.
    6. Sylvain Leduc & Daniel J. Wilson, 2012. "Should transportation spending be included in a stimulus program? a review of the literature," Working Paper Series 2012-15, Federal Reserve Bank of San Francisco.
    7. Melvin Ayogu, 0. "Infrastructure and Economic Development in Africa: A Review-super- †," Journal of African Economies, Centre for the Study of African Economies, vol. 16(suppl_1), pages -126.
    8. Fedderke, J.W. & Bogetic, Z., 2009. "Infrastructure and Growth in South Africa: Direct and Indirect Productivity Impacts of 19 Infrastructure Measures," World Development, Elsevier, vol. 37(9), pages 1522-1539, September.
    9. Pellervo Hamalainen, 2009. "Review of literature on the productivity of public capital," Discussion Papers 55, Aboa Centre for Economics.
    10. Colin J Hunt, 2011. "The Interaction of Public and Private Capital," Post-Print hal-00675397, HAL.
    11. Márquez, Miguel A. & Ramajo, Julián & Hewings, Geoffrey J. D., 2011. "Public Capital and Regional Economic Growth: a SVAR Approach for the Spanish Regions," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 21, pages 199-223.
    12. Nawaz, Saima & Mangla, Inayat Ullah, 2021. "The economic geography of infrastructure in Asia: The role of institutions and regional integration," Research in Transportation Economics, Elsevier, vol. 88(C).
    13. Valter Di Giacinto & Giacinto Micucci & Pasqualino Montanaro, 2010. "Dynamic Macroeconomic Effects of Public Capital: Evidence from Regional Italian Data," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 69(1), pages 29-66, April.
    14. Bronzini, Raffaello & Piselli, Paolo, 2009. "Determinants of long-run regional productivity with geographical spillovers: The role of R&D, human capital and public infrastructure," Regional Science and Urban Economics, Elsevier, vol. 39(2), pages 187-199, March.
    15. Federici, Andrea, 2018. "Il rapporto tra capitale pubblico e altre variabili macroeconomiche: analisi della letteratura [The relationship between public capital and other macroeconomic variable: a literature review]," MPRA Paper 88515, University Library of Munich, Germany.
    16. Lakshmanan, T.R., 2011. "The broader economic consequences of transport infrastructure investments," Journal of Transport Geography, Elsevier, vol. 19(1), pages 1-12.
    17. Luoto, Jani, 2011. "Aggregate infrastructure capital stock and long-run growth: Evidence from Finnish data," Journal of Development Economics, Elsevier, vol. 94(2), pages 181-191, March.
    18. Arghya Ghosh & Kieron Meagher, 2011. "The Political Economy of Infrastructure Investment: Competition, Collusion and Uncertainty," ANU Working Papers in Economics and Econometrics 2011-556, Australian National University, College of Business and Economics, School of Economics.
    19. Farhadi, Minoo, 2015. "Transport infrastructure and long-run economic growth in OECD countries," Transportation Research Part A: Policy and Practice, Elsevier, vol. 74(C), pages 73-90.
    20. Bertrand Candelon & Gilbert Colletaz & Christophe Hurlin, 2013. "Network Effects and Infrastructure Productivity in Developing Countries," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 75(6), pages 887-913, December.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oec:itfaab:2011/4-en. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/itoecfr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.