Transportation and regional inequality: the impact of railways in the Nordic countries, 1860–1960
Section snippets
The importance of transportation for catching up in economic growth
Before industrialisation, the Nordic countries were relatively poor and isolated. They stood on the periphery of Europe. The region's population was predominantly rural and towns were small, since the constraints of land and transportation limited the carrying capacity of their hinterlands. By the late nineteenth century, rapid population growth in the region had resulted in a large landless rural underclass and some areas were probably at their Malthusian limits in terms of population density.
Economic growth and regional inequality
In 1965 Jeffrey Williamson formulated his famous hypothesis about long term regional inequality. Considering a large dataset of regional income per capita between 1920 and 1960, he found a peak in inequality in the middle of this period of economic growth. This suggested a pattern of rising levels of regional inequality until a certain turning point, after which inequality would start to decrease, giving the shape of an upside down letter U. He argued that some regions appear as early
The investment in Nordic railways
The nineteenth and early twentieth centuries were the formative years in terms of the creation of the modern Nordic states. Investment in railways became part of a strategy of these states to promote their nations' interests in economic development, military security and political unification. Despite political differences all Nordic countries were largely autonomous and able to make their own decisions about the scope and shape of important national infrastructure investments.38
Turbulence in population distribution
We assert that railways were built before local population growth and helped shape the economic landscape of the entire Nordic region. The counterargument is that railways were merely a response to existing economic conditions. For such a counterargument to hold we would expect the first railway lines to connect the urban agglomerations that were largest in 1880. Thereafter, forces favouring agglomeration would have worked to sustain the growth of already prosperous municipalities, leaving the
Conclusions
Within a period of a hundred years between 1860 and 1960, the Nordic region changed from being part of Europe's poor periphery to becoming one of the world's most prosperous economies. Its take-off occurred in the late nineteenth century and has often been attributed to export-demand from the growing British economy; although domestic market forces, fuelled by imports, were probably also important. However, neither export- nor import-driven growth could have been sustained without major
Acknowledgements
We are thankful to participants in the Studying GDP Regional Imbalances for a Better Long-term Analysis of European lntegration seminar for their useful comments and suggestions. We are also thankful to the three anonymous referees and to the editor Miles Ogborn for valuable comments on how to improve the manuscript. Enflo acknowledges financial support from Knut and Alice Wallenberg's Foundation (KAW2014.0138). This research has also been financed by the Spanish Ministry for the Economy and