Dynamics of Interventionism and Economic Development in Quebec before 1854

27 Pages Posted: 22 Dec 2020 Last revised: 3 Dec 2021

See all articles by Vincent Geloso

Vincent Geloso

George Mason University - Department of Economics

Date Written: October 23, 2020


The theory of interventionism argues that government interventions are inherently destabilizing which helps explain the growth of government. I argue that the theory of interventionism is also useful process of economic growth. At first, an intervention reduces living as a level change. However, because the intervention alters entrepreneurial incentives, there is a second effect that decelerates economic growth (Czeglédi 2014). Any additional intervention to deal with the distortions generated by initial interventions merely accentuates these two effects. Thus, the dynamics of interventionism entail a cumulative process of divergence. To illustrate my argument, I use the example of milling regulations in colonial Quebec. Directly, these regulations reduced the quantity and quality of milling services. However, indirectly, they altered long-run specialization patterns notably in dairy production. As dairy exports later boomed due to exogenous factors, this alteration eventually led to greater divergence.

Keywords: Dynamics of Interventionism, Canadian Economic History, Dairy Production

JEL Classification: N51, N41, D24

Suggested Citation

Geloso, Vincent, Dynamics of Interventionism and Economic Development in Quebec before 1854 (October 23, 2020). GMU Working Paper in Economics No. 21-47, Available at SSRN: https://ssrn.com/abstract=3717700 or http://dx.doi.org/10.2139/ssrn.3717700

Vincent Geloso (Contact Author)

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States

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