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Transportation Technology and Economic Change: The Impact of Colonial Railroads on City Growth in Africa

Remi Jedwab () and Alexander Moradi ()

No 2013-17, CSAE Working Paper Series from Centre for the Study of African Economies, University of Oxford

Abstract: What is the impact of modern transportation technology on long-run economic change in poor countries with high trade costs? Rail construction in colonial Sub-Saharan Africa provides a natural experiment: 90% of African railroad lines were built before independence, in a context where headloading was the dominant transportation technology. Using new data on railroads and cities over one century within one country, Ghana, and Africa as a whole, we find large permanent effects of transportation technology on economic development. First, colonial railroads had strong effects on commercial agriculture and urban growth before independence. We exploit various identification strategies to ensure these effects are causal. Second, using the fact that African railroads fell largely out of use post-independence, due to mismanagement and lack of maintenance, we show that colonial railroads had a persistent impact on cities. While colonial sunk investments (e.g., schools, hospitals and roads) partly contributed to urban path dependence, evidence suggests that railroad cities persisted because their early emergence served as a mechanism to coordinate contemporary investments for each subsequent period. Railroad cities are also wealthier than non-railroad cities of similar sizes today. This suggests a world where shocks to economic geography can trigger an equilibrium in which cities will emerge to facilitate the accumulation of factors, and thus have long-term effects on economic growth.

Keywords: Transportation Technology; Development; Path Dependence; Growth (search for similar items in EconPapers)
JEL-codes: R4 R1 O1 O3 N97 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-afr, nep-geo, nep-his, nep-tre and nep-ure
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
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Working Paper: Transportation Technology and Economic Change: The Impact of Colonial Railroads on City Growth in Africa (2014) Downloads
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