Big Push or Big Grab? Railways, Government Activism, and Export Growth in Latin America, 1865–1913

29 Pages Posted: 15 Oct 2015

See all articles by Vincent Bignon

Vincent Bignon

Banque de France

Rui Esteves

Graduate Institute of International and Development Studies (IHEID)

Alfonso Herranz‐Loncán

University of Barcelona

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Date Written: November 2015

Abstract

Railways were one of the main engines of the Latin American trade boom before 1914. Railway construction often required financial support from local governments, which depended on their fiscal capacity. However, since the main government revenues were trade‐related, this generated a two‐way feedback between government revenues and railways, with a potential for multiple equilibria. The empirical tests in this article support the hypothesis of such a positive two‐way relationship. The main implication of our analysis is that the build‐up of state capacity was a necessary condition for railway expansion and also, to a large extent, for export expansion in Latin America during the first globalization.

Suggested Citation

Bignon, Vincent and Esteves, Rui and Herranz-Loncan, Alfonso, Big Push or Big Grab? Railways, Government Activism, and Export Growth in Latin America, 1865–1913 (November 2015). The Economic History Review, Vol. 68, Issue 4, pp. 1277-1305, 2015, Available at SSRN: https://ssrn.com/abstract=2674353 or http://dx.doi.org/10.1111/ehr.12094

Vincent Bignon (Contact Author)

Banque de France ( email )

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+33142924330 (Phone)

Rui Esteves

Graduate Institute of International and Development Studies (IHEID) ( email )

PO Box 136
Geneva, CH-1211
Switzerland

Alfonso Herranz-Loncan

University of Barcelona ( email )

Gran Via de les Corts Catalanes, 585
Barcelona, 08007
Spain

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