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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

Sofia Teives Henriques and Paul Sharp ()
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Sofia Teives Henriques: Lund University

No 148, Working Papers from European Historical Economics Society (EHES)

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.

Keywords: Industrial Revolution; natural resources; coal; electrification; energy prices (search for similar items in EconPapers)
JEL-codes: N1 N5 N7 O13 Q4 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene, nep-gro and nep-his
Date: 2019-03
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Working Paper: 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 (2018) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:hes:wpaper:0148

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