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The Growth Contribution of Colonial Indian Railways in Comparative Perspective

Dan Bogart (), Latika Chaudhary and Alfonso Herranz-Loncán ()

No 33, CEH Discussion Papers from Centre for Economic History, Research School of Economics, Australian National University

Abstract: It is widely recognized that railways were one of the most important drivers of economic growth in the 19th and 20th century, but it is less recognized that railways had a different impact across countries. In this paper, we first estimate the growth impact of Indian railways, one of the largest networks in the world circa 1900. Then, we show railways made a smaller contribution to income per-capita growth in India compared to the most dynamic Latin American economies between 1860 and 1912. The smaller contribution in India is related to four factors: (1) the smaller size of railway freight revenues in the Indian economy, (2) the higher elasticity of demand for freight services, (3) lower wages, and (4) higher fares. Our results suggest large disruptive technologies such as railways and other communication technologies can generate huge resources savings, but may not have large growth impacts.

Keywords: Railways; Social Savings; ICT; India; Growth Accounting (search for similar items in EconPapers)
JEL-codes: N7 O47 P52 R4 (search for similar items in EconPapers)
Date: 2015-02
New Economics Papers: this item is included in nep-dev, nep-gro, nep-his and nep-tre
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