Transportation Costs and the Social Savings of Railroads in Latin America. The Case of Peru

Abstract

This article estimates the social savings of the railroads in Peru in the late 19th and early 20th centuries. The construction of railroads made it possible for Peruvians to substitute the traditional system of mules and llamas, although only for a few routes. Using primary and secondary sources, I estimate the social savings for 1890, 1904, 1914 and 1918. Social savings ranged between 0.3 per cent and 1.3 per cent of GDP in 1890, but then increased to a range between 3.6 per cent and 9.4 per cent of GDP in 1918. The social savings of railroads in Peru were comparable to those for the United States and Great Britain but were much lower than those for Mexico, Brazil and Argentina, largely because Peru had very few railroads.

“For the public benefit”? Railways in the British Cape Colony

“…The second is the literature on the effects of railway construction on the economies of developing countries during the first globalization. Many of these studies are based on the social saving methodology (Coatsworth 1979;Ramírez 2001;Summerhill 2005;Herranz-Loncán 2011Chaves et al 2013;Zegarra 2013;. Others use detailed archival data to provide a microeconomic perspective on railway growth effects in various countries worldwide (e.g.…”

Transport Technology and Economic Expansion: The Growth Contribution of Railways in Latin America Before 1914

“…Among those countries that built extensive railway networks before 1914, social savings were only relatively low in Uruguay (Herranz-Loncán 2011b), because the geography of this country provided it with exceptional natural transport advantages which made railways less indispensable. Social savings were also low in Colombia and Peru, but in these cases it was largely due to the smaller size of the railway network and the relatively low development of railway transport services (Ramírez 2001;Zegarra 2013). 191318.0/38.0 Mexico 191024.9/38.5 Argentina 191320.6 Uruguay 1912-13 3.8 Colombia 19273.4/7.9 Peru 19143.7/6.7 Sources: Fishlow (1965; Fogel (1964, p. 223); Hawke (1970, p. 196); Metzer (1977, p.50); Caron (1983, p. 44); Herranz-Loncán (2008, p. 140); Summerhill (2003, p. 89); Coatsworth (1979, p. 952); Herranz-Loncán (2011a, p. 40); Herranz-Loncán (2011b, p. 13); Ramírez (2001, p. 89); Zegarra (2013, p. 55).…”

“…Among those countries that built extensive railway networks before 1914, social savings were only relatively low in Uruguay (Herranz-Loncá n 2011b), because the geography of this country provided it with exceptional natural transport advantages, which made railways less indispensable. Social savings were also low in Colombia and Peru, but in these cases it was largely due to the smaller size of the railway network and the relatively low development of railway transport services (Ramírez 2001;Zegarra 2013). In fact, with the exception of Uruguay, in countries that built large railway networks a substantial proportion of GDP per capita growth can be directly explained by the development of the railway sector.…”

Big push or big grab? Railways, government activism, and export growth inLatinAmerica, 1865–1913

“…See Coatsworth, Growth against development , pp. 70–3, 103; Zegarra, ‘Transportation costs’, pp. 55–61; Summerhill, Order against progress , pp.…”

“…For Argentina, Herranz‐Loncán, ‘El impacto directo’, p. 40; for Mexico, Coatsworth, ‘Indispensable railroads’, p. 952; for Brazil, Summerhill, Order against progress , p. 89; for Colombia, Ramírez, ‘Los ferrocarriles’, p. 89; and for Peru, Zegarra, ‘Transportation costs’, p. 55.…”