New EHES working paper
In this paper we follow up on recent findings about the surprising macroeconomic and demographic changes in Germany before 1850 and investigate one of the possible drivers of these changes: increasing market integration due to investment in paved roads.
For centuries, overland transport remained almost unchanged since Roman times until the late 18th century. Before the establishment of paved roads, roads were often described by contemporaries as mortal traps for men and horses, whose state barely allowed carriages to travel faster than pedestrians. An example might be illustrating. Before the Muenster-Hamm road was paved, it took 36 hours to go from one city to the other. After being paved, travelling time was reduced to only eight hours.
The importance of this mean of transport was soon recognised by the Prussian government in the early 19th century, which invested a considerable amount of resources in establishing a large paved road network. Around 1816, there were about 3.700 km of paved roads in the whole Prussian kingdom. By the middle of the century, there were 13.400km. This impressive development did not stop with the coming of the railway age, but it continued until the late 19th century.
The spread of the paved road network in the Prussian kingdom was very uneven. The Western provinces of the empire such as Westphalia and the Rhineland had a special trait (at least until 1850) from the Prussian government and they did benefit more from public investment due to their economic importance. In our study, we focus on the province of Westphalia.
To analyse the effects of paved roads on economic development, we focus on market integration. One way in which spatially separated markets become more integrated is through lower transport costs, since regions become closer in economic terms. From this integration, regions can benefit in many ways. One of the most important is the intensification of trade that leads to the regional specialization of production (i.e. Smithian growth).
From our analysis, at least two points are worth noting. One is that we take a novel approach to analyse the effects of paved roads. Instead of coding whether a city had access to the paved road network or not (i.e. dummy-variable approach), we went through all cities and for each time period we looked at the number of paved road connections to neighbouring cities. By doing this, we are able to capture some network effects that arise with the building of new paved roads that a dummy approach does not capture. The second point is that we put paved roads in a comparative perspective with other transport infrastructures such as waterways and railways by developing a digitised map of Westphalia for the period 1821-1855. We find that paved roads have always a significant and positive effect on market integration and that this effect is surprisingly bigger than the effect of railways.
These results point out that paved roads deserve a closer inspection – and there is a good reason to listen for policy makers, too: In advanced countries, the railway networks have been declining for decades, and more goods are transported on trucks. In developing countries, the state is often too poor to finance a railroad, but could maybe afford a paved road. Roads are also more flexible, as they can be used by the broad public, be it lorries, bicycles or mule-drawn carriages without time constraints.
Today, many underdeveloped regions still suffer from the same transport problems the Kingdom of Prussia suffered two hundred years ago. The lack of paved roads complicates social and economic exchange especially in the rainy season, where most unpaved roads cannot be used. Thus, we think both for economic historians and for development policy makers alike, roads and economic development are increasingly worth the trip.
The paper can be downloaded here.
|Daniel Gallardo Albarrán