The contribution of railways to economic growth in Latin America before 1914: a growth accounting approach

Railways are usually considered as one of the most important innovations that fostered the transition of Latin America to economic growth before 1914. The social saving estimates that are available for several Latin American countries seem to confirm that view. However, the interpretation of the results of the social saving literature is not straightforward, since the comparison among social savings calculated for different countries and years may be troublesome, and the actual meaning of the social saving estimates is not clear. This paper suggests an alternative approach to the economic impact of railways in Latin America. It presents estimates of the direct growth contribution of the railway technology in Argentina, Brazil, Mexico and Uruguay before 1914, which are calculated on the basis of the growth accounting methodology. The outcomes of the estimation indicate that railway effects on Uruguayan economic growth were very low. By contrast, in the other three cases under study (Argentina, Mexico and Brazil) the railways provided huge direct benefits. In Argentina and Mexico, these amounted to between one fifth and one quarter of the total income per capita growth of the period under analysis. By contrast, in the case of Brazil, the outcomes of the analysis indicate that the direct contribution of railways to growth would have been higher than the whole income per capita growth of the Brazilian economy before 1914. This unexpected result might suggest that the national level is not the most adequate scale to analyse the economic impact of network infrastructure in the case of large, geographically unequal and insufficiently integrated developing economies.Railways; Latin America; Economic Growth

Foreign trade traps in the european periphery: Spain, 1870-1913

In this article we research into the difficulties that foreign trade imposed on Spanish process of integration into the international economy in the years prior to the First World War. We start out by examining some features of the foreign trade structure of the country. By means of an econometric analysis of import and export series, it is possible to observe the presence of a trend towards trade deficit, which was in force when Spain grew at a rate similar to that of its trading partners. We also check that, in the absence of these compensatory mechanisms, adjustment in foreign payments could be reached by means of protective measures and the exchange rate.balance-of-payments constraints, foreign trade

The contribution of railways to economic growth in Latin America before 1914: a growth accounting approach

Railways are usually considered as one of the most important innovations that fostered the transition of Latin America to economic growth before 1914. The social saving estimates that are available for several Latin American countries seem to confirm that view. However, the interpretation of the results of the social saving literature is not straightforward, since the comparison among social savings calculated for different countries and years may be troublesome, and the actual meaning of the social saving estimates is not clear. This paper suggests an alternative approach to the economic impact of railways in Latin America. It presents estimates of the direct growth contribution of the railway technology in Argentina, Brazil, Mexico and Uruguay before 1914, which are calculated on the basis of the growth accounting methodology. The outcomes of the estimation indicate that railway effects on Uruguayan economic growth were very low. By contrast, in the other three cases under study (Argentina, Mexico and Brazil) the railways provided huge direct benefits. In Argentina and Mexico, these amounted to between one fifth and one quarter of the total income per capita growth of the period under analysis. By contrast, in the case of Brazil, the outcomes of the analysis indicate that the direct contribution of railways to growth would have been higher than the whole income per capita growth of the Brazilian economy before 1914. This unexpected result might suggest that the national level is not the most adequate scale to analyse the economic impact of network infrastructure in the case of large, geographically unequal and insufficiently integrated developing economies

The contribution of railways to economic growth in Latin America before 1914: a growth accounting approach

Railways are usually considered as one of the most important innovations that fostered the transition of Latin America to economic growth before 1914. The social saving estimates that are available for several Latin American countries seem to confirm that view. However, the interpretation of the results of the social saving literature is not straightforward, since the comparison among social savings calculated for different countries and years may be troublesome, and the actual meaning of the social saving estimates is not clear. This paper suggests an alternative approach to the economic impact of railways in Latin America. It presents estimates of the direct growth contribution of the railway technology in Argentina, Brazil, Mexico and Uruguay before 1914, which are calculated on the basis of the growth accounting methodology. The outcomes of the estimation indicate that railway effects on Uruguayan economic growth were very low. By contrast, in the other three cases under study (Argentina, Mexico and Brazil) the railways provided huge direct benefits. In Argentina and Mexico, these amounted to between one fifth and one quarter of the total income per capita growth of the period under analysis. By contrast, in the case of Brazil, the outcomes of the analysis indicate that the direct contribution of railways to growth would have been higher than the whole income per capita growth of the Brazilian economy before 1914. This unexpected result might suggest that the national level is not the most adequate scale to analyse the economic impact of network infrastructure in the case of large, geographically unequal and insufficiently integrated developing economies

Growth (and Segregation) by Rail: How the Railways Shaped Colonial South Africa Growth (and Segregation) by Rail: How the Railways Shaped Colonial South Africa *

Abstract The railway played a large part in late nineteenth century and early twentieth century globalization since, to benefit from the international economy, peripheral countries needed cheap inland transport. This paper discusses how the railway transformed the economy of South Africa's Cape Colony during the first era of globalization. A very large share of the Colony's GDP came from rail transport -its resource saving effect was one of the highest in the world at that time. We estimate that 46 to 51% of the Colony's increase in labor productivity between 1873 and 1905 came directly from the railway, whether from investment in the rail network or from savings in transport costs. We argue that it was the boom in diamond production, necessitating the building of the railway to connect the Kimberley diamond fields with the international economy, that weighted the Colony's economy so heavily towards the rail transport sector. The railway not only boosted the Colony's growth, it also re-shaped its economic geography, organizing it around the railway lines that connected the diamond mines with the ports. Areas not served by the railway missed out on the benefits of globalization. As these areas were mostly populated by blacks, the railway helped to create a dual economy with a racial social divide and was later instrumental in creating black 'homelands' and establishing the apartheid institutions. JEL CODES: N4, H4,