Economic benefits of wheeled transportation in Colonial West Africa

A fascinating econ history paper by the trio – Isaías ChavesStanley EngermanJames Robinson.

It looks at political economics of why wheeled transport was not introduced in West Africa in colonial times. More interestingly, it shows how railways could have created a visible impact in these economies:

One of the great puzzles of Sub-Saharan African economic history is that wheeled transportation was barely used prior to the colonial period. Instead, head porterage was the main method of transportation. The consensus among historians is that this was a rational adaption to the underlying conditions and factor endowments. In this paper we undertake the first systematic investigation of the relative costs of the different forms of wheeled transportation in Africa.

We focus on calculating the social savings and social rate of return associated with the introduction of the railway into colonial British West Africa. We provide more speculative estimates of the social savings of other forms of wheeled transportation.

We find that all forms of wheeled transportation were economically efficient in the sense that they increased national income, though the estimated social savings of railways were modest when compared to GDP. However, we also find that the social rate of return of railways was exceedingly high, with annual social returns being equivalent to the entire capital outlays in Nigeria, i.e., railways there had a social rate of return of around 100%. Contrary to the conventional wisdom, railways appear to have been a very good social investment in West Africa because they were cheap to build. We discuss some alternative hypotheses that may nevertheless account for why they were not adopted.

Why were the railways not developed?

If wheeled transportation was economically e¢ cient and generated very high social rates of return, why was it not adopted? For the case of railways, we can identify three types of explanations.

The …first is the obvious point that it was very difficult to construct such large public works as railways without su¢ cient political centralization. We illustrate this argument in Sierra Leone.

The second comes from thwarted attempts by a mission from the Asante state in Ghana to contract British engineers in London to build a railway in 1895: European powers   had an interest in restricting technology adoption by African polities. Asante’s attempt to build a railway, part of a larger program of modernization embarked on after 1874, was blocked by the British colonial secretary Joseph Chamberlain. The likely explanation is that Britain did not want autonomous modernization of African polities. African states considering adopting railways invariably needed to rely on foreign capital, engineers and expertise. This was normal in the 19th century: railways in Latin American and the Middle East were built with foreign capital and expertise. But at the time of the scramble for Africa, European powers wished to control this type of technology adoption by African polities because it made them harder to control, a kind of incentive that was absent in Latin America and the Middle East.

The third explanation comes from the rich evidence on the one independent African polity which actually built a railway, Ethiopia. Namely, African polities that could have pro…tably adopted railway technology had a political incentive not to because doing so might hasten the loss of sovereignty to Europeans. Here the evidence clearly shows that the Ethiopians were very concerned that the constructing a railway from Djibouti up to Addis Ababa would precipitate a process of colonial domination and conquest. Similar mechanisms were at work elsewhere, for example in the Sultanate of Zanzibar.

Superb bit..

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