Proposal preview

Exploring the institutional turn in in transport and communication history. Comparative aspects of the regulated economy of transport, communication, and information technology, 1850-2000

Traditionally, mainstream transport history has focused on empirical and macro economic oriented approaches or individual cases on the micro level. The institutional turn in transport history during the last decade, has made important contributions pinpointing the new role of the nation state, both as a regulator, investor and owner in the transport and communication industries in various countries. The rapid and accelerating development of transport and communication technologies has been an integrated part, as well as an important economic driving force both in the first, second, and third industrial revolutions. However, the role of the state has since then been challenged, changed and restored or abandoned. Market solutions – national or global – currently seems to dominate the regulatory settings in central transport and communication industries. Recently, we can also see signs of new nationalization processes as a reaction to the deregulation processes. How has the role of the national state as a regulatory force changed seen from a comparative perspective?
Here we suggest that an exploratory comparative institutional approach is used to open up a comparative discussion of various institutional patterns regarding the development and change of regional, national and international institutional settings. Central issues concern the comparative aspects on a global scale of the relation between the various types of state action. In this context, the various roles of the state in terms of ownership, subsidies, contractual arrangements, etc., are of particular interest as well as institutional settings, the technology, and the market forces behind the development of several network industries within the transport and communication sector in various countries. Network industries of special interest are the telephone industry, civil aviation, railway, telegraph, postal services, and urban transport.
The underlying purpose of the theme is to bring together both experienced scholars and young doctoral students in a session combining both empirical research and theoretical approaches in transport and communications. We also know that there are a number of research projects going on in these respects, and would like to create a meeting among the leading researchers. By also inviting a number of young scholars, we like to believe that the outcome of the theme may contribute to a new understanding of both contemporary and historical processes in the field.

Organizer(s)

  • Lena Andersson-Skog Umeå University,Sweden lena.andersson-skog@ekhist.umu.se Sweden
  • Jan Ottosson Uppsala University, Sweden jan.ottosson@ekhist.uu.se Sweden

Session members

  • ,
  • Javier Vidal Olivares, University of Alicante
  • Florian Ploeckl, University of Adelaide
  • Joseph Amankwah-Amoah, University of Kent
  • Lena Andersson-Skog, Umeå University
  • Dan Bogart, UC Irvine
  • Humberto Laudares, The Graduate Institute, Geneva
  • Björn Hasselgren, Uppsala University
  • Latika Chaudhary Hartmann, Naval Postgraduate School
  • Pedro Pablo Ortúñez-Goicolea, Universidad de Valladolid
  • Josef Taalbi, Lund University
  • Hana Nielsen, Lund University
  • Alexandra Lopez Cermeno, Lund University
  • Cesar Hidalgo , MIT
  • Kerstin Enflo , Lund University
  • Cristian Jara-Figueroa, MIT
  • Jan Ottosson, Uppsala University
  • Perola Maria Goldfeder e Castro, University of São Paulo – USP

Discussant(s)

  • Lena Andersson-Skog Umeå University lena.andersson-skog@umu.se
  • Björn Hasselgren Uppsala University bjorn.hasselgren@ekhist.uu.se
  • Magnus Lindmark Umeå University magnus.lindmark@umu.se
  • Jan Ottosson Uppsala University jan.ottosson@ekhist.uu.se

This panel has Call for Papers open.
If you are interested in participating, please contact the panel organizer(s) to submit a proposal.

  • Lena Andersson-Skog, Umeå University,Sweden, lena.andersson-skog@ekhist.umu.se, Sweden
  • Jan Ottosson, Uppsala University, Sweden, jan.ottosson@ekhist.uu.se, Sweden

Papers

Panel abstract

Traditionally, mainstream transport history has focused on empirical and macro economic oriented approaches or individual cases on the micro level. The institutional turn in transport history during the last decade, has made important contributions pinpointing the new role of the nation state, both as a regulator, investor and owner in the transport and communication industries in various countries. The rapid and accelerating development of transport and communication technologies has been an integrated part, as well as an important economic driving force both in the first, second, and third industrial revolutions. However, the role of the state has since then been challenged, changed and restored or abandoned. Market solutions – national or global – currently seems to dominate the regulatory settings in central transport and communication industries. Recently, we can also see signs of new nationalization processes as a reaction to the deregulation processes.

1st half

National Rules, Regional Differences? Explaining the regional provision and productivity of a public monopolist: The Case of the German Imperial Postal Service

Florian Ploeckl

National public monopolies are usually charged with delivering the same service everywhere with the same conditions. This also held for the Postal services of the 19th century, the historical forerunner of such a national public service, when they spread out extensively under the idea of “Universal Access”. Nevertheless, different regions received different levels of service provision and as Ploeckl (2016) demonstrates for the case of the German Imperial Reichspost the productive efficiency of the service differed as well. This paper identifies the reasons why a public agency operated differently across regions and whether these underlying causes were the result of exogenous factors, for example urbanization, geography or literacy, or endogenous reasons, for example regional political capture.

National public monopolies are usually charged with delivering the same service everywhere with the same conditions. This also held for the Postal services of the 19th century, the historical forerunner of such a national public service, when they spread out extensively under the idea of “Universal Access”. Nevertheless, different regions received different levels of service provision and as Ploeckl (2016) demonstrates for the case of the German Imperial Reichspost the productive efficiency of the service differed as well. This paper identifies the reasons why a public agency operated differently across regions and whether these underlying causes were the result of exogenous factors, for example urbanization, geography or literacy, or endogenous reasons, for example regional political capture.

Reluctant infrastructure manager 180614 hasselgren

Björn Hasselgren, Department of Economic History, Uppsala University, Sweden

Governments have a choice whether to intervene in the transport infrastructure sector to manage, finance and organize and sometimes own the assets of the sector, or to rely on markets and private sector actors for the provision of these systems. From the 1840s, railroads and a more modern road system generally developed based on a mix of government and private/local government initiatives. In many countries steps towards centralization were taken to coordinate railroads and roads during WW 1. In Sweden, which is at the core of the empirical example in this paper the government coordination primarily took place in the 1930-40s, as the private- and local government-owned railroads and rural public roads, a majority of the total system, were taken over (nationalized) by the State. In this paper I facilitate an understanding and explanation of the successive steps that led to the decision to nationalize railroads and roads.

Governments have a choice whether to intervene in the transport infrastructure sector to manage, finance and organize and sometimes own the assets of the sector, or to rely on markets and private sector actors for the provision of these systems. From the 1840s, railroads and a more modern road system generally developed based on a mix of government and private/local government initiatives. In many countries steps towards centralization were taken to coordinate railroads and roads during WW 1. In Sweden, which is at the core of the empirical example in this paper the government coordination primarily took place in the 1930-40s, as the private- and local government-owned railroads and rural public roads, a majority of the total system, were taken over (nationalized) by the State. In this paper I facilitate an understanding and explanation of the successive steps that led to the decision to nationalize railroads and roads.

Investor Returns to Indian Railway Companies in the Age of High Imperialism

Dan Bogart and Latika Chaudhary Hartmann

Investor Returns to Indian Railway Companies in the Age of High Imperialism We study the stock market performance of Indian railway on the London Stock Exchange using monthly stock price data from 1869 to 1910. We first construct the returns for the 8 major railway companies operating in India and an aggregate Indian railways index drawing on work by Grossman (2017). We then compare the Indian railway index to railways in developing countries and to more developed countries of the 19th century such as Britain. Finally, we conduct an event study analysis of individual company stock prices before-after macroeconomic shocks and key announcements signalling a change in policy. We provide a comparative perspective on the financial performance of British companies operating in a colonial state under a public-private regulatory structure. The paper will also shed light on whether and how information and news from India affected returns in London.

Investor Returns to Indian Railway Companies in the Age of High Imperialism We study the stock market performance of Indian railway on the London Stock Exchange using monthly stock price data from 1869 to 1910. We first construct the returns for the 8 major railway companies operating in India and an aggregate Indian railways index drawing on work by Grossman (2017). We then compare the Indian railway index to railways in developing countries and to more developed countries of the 19th century such as Britain. Finally, we conduct an event study analysis of individual company stock prices before-after macroeconomic shocks and key announcements signalling a change in policy. We provide a comparative perspective on the financial performance of British companies operating in a colonial state under a public-private regulatory structure. The paper will also shed light on whether and how information and news from India affected returns in London.

From Telegraphs to Space: Transport Infrastructure, Development and Deforestation in the Amazon

Humberto Laudares

In this article, I exploit a source of quasi-random variation in observed infrastructure and develop a historical route opened by the Rondon Com- mission (1915-1917) as an instrumental variable strategy to investigate the impact of a national highway on the development of the Amazon region. Furthermore, I also explore potential transmission mechanisms, such as deforestation. My empirical tests rely on three data sources: night-time satellite data, census micro-data and deforestation satellite data. Using night-time satellite data, I find that for each kilometer's distance away from highway, the income of a pixel (0.86km2) captured by the intensity of night-time light decreases by 0.10%.

In this article, I exploit a source of quasi-random variation in observed infrastructure and develop a historical route opened by the Rondon Com- mission (1915-1917) as an instrumental variable strategy to investigate the impact of a national highway on the development of the Amazon region. Furthermore, I also explore potential transmission mechanisms, such as deforestation. My empirical tests rely on three data sources: night-time satellite data, census micro-data and deforestation satellite data. Using night-time satellite data, I find that for each kilometer's distance away from highway, the income of a pixel (0.86km2) captured by the intensity of night-time light decreases by 0.10%.

Regulating in Times of War: Railways in Spain (1913-1919)

Pedro Pablo Ortúñez-Goicolea

This paper aim to study what answers the Spanish State gave to the problems caused by the First World War in the Spanish railway system. The Spanish rail system was based on concessions that the State had given to private companies. This system was inaugurated in 1855 and, among other regulations, provided that the fares were controlled by the State: there were maximum fares that could not be raised without authorization from the Government. The First World War was a blow to this system of concessions. The Spanish State changed from regulator to owner, and the First World War was the key in this process. The Spanish Government acted late and badly, before the effects that the War was causing. This was so because of the weakness of liberal institutions in Spain in the first third of the 20th century.

This paper aim to study what answers the Spanish State gave to the problems caused by the First World War in the Spanish railway system. The Spanish rail system was based on concessions that the State had given to private companies. This system was inaugurated in 1855 and, among other regulations, provided that the fares were controlled by the State: there were maximum fares that could not be raised without authorization from the Government. The First World War was a blow to this system of concessions. The Spanish State changed from regulator to owner, and the First World War was the key in this process. The Spanish Government acted late and badly, before the effects that the War was causing. This was so because of the weakness of liberal institutions in Spain in the first third of the 20th century.

2nd half

Taalbi Nielsen 2018 What killed the electric carJuly 2018

Josef Taalbi, Lund University; Hana Nielsen, Lund University

More than 15% of all global carbon emissions come from the transport sector, not far behind the industry sector with its 20% share. But while the industry sector went through some dynamic changes with substantial efficiency improvements, technological change and fuel switching, particularly since the 1970s, the transport sector remains, by large, locked-in in fossil technology. Nevertheless, this has not always been the case. In 1900, 38% of the US automobiles were powered by electricity, while 40% ran on steam. Indeed, gasoline driven vehicles accounted for the smallest share of the total, some 22%. However, by 1905 gasoline driven vehicles began to dominate the market and by 1920 electric vehicles (as well as steam ones) vanished from the US market. As the absolute dominance of the gasoline vehicles in the transport sector rounds up one century, electric vehicles seem to have a rebirth recently, particularly given the technological advances in...

More than 15% of all global carbon emissions come from the transport sector, not far behind the industry sector with its 20% share. But while the industry sector went through some dynamic changes with substantial efficiency improvements, technological change and fuel switching, particularly since the 1970s, the transport sector remains, by large, locked-in in fossil technology. Nevertheless, this has not always been the case. In 1900, 38% of the US automobiles were powered by electricity, while 40% ran on steam. Indeed, gasoline driven vehicles accounted for the smallest share of the total, some 22%. However, by 1905 gasoline driven vehicles began to dominate the market and by 1920 electric vehicles (as well as steam ones) vanished from the US market. As the absolute dominance of the gasoline vehicles in the transport sector rounds up one century, electric vehicles seem to have a rebirth recently, particularly given the technological advances in the batteries. Until recently, the superiority of gasoline vehicles over electric ones have been clear-cut but how did the electric models differed from other available technology 100 years ago, particularly in the years 1905-1920 when the electric cars lost its race to gasoline? What do we know about the technological performance in this period and what were the actual drivers of this technology lock-in in gasoline? How this can explain the failure of the electric vehicles to capture the majority of the market? Where there significant regional differences? What was the role of state and institutions in facilitating this technology lock-in? This paper for the first time provides empirical and quantitative evidence on the race between the three major types of personal vehicles – steam, gasoline and electric vehicles. The research aims to systematically compare all vehicle types available in the US market between 1890 and 1920 against a large number of general as well as region-specific characteristics such as the availability of infrastructures and its development (electrification), complementarities (oil extraction), fuel prices and potential buyer’s characteristics. The major source of data is an entirely new database on all vehicles in the US market based on the ‘Standard Catalog of American Cars’. The database has a total of 5,000 vehicle models with information on the geographical location, size (passenger count), drive (steam, electric or gasoline), driving range, cylinders, horsepower, price and weight.

Does connectivity promote knowledge diffusion? Evidence from the evolution of Swedish railroad

C. Jara-Figueroa, MIT Media Lab; A. L. Cermeño, Lund University; C. Hidalgo, MIT Media Lab; K. Enflo, Lund University

Recent research has shown that industrial diversification is a path dependent process, where regions build on the capabilities they already possess to adopt new industries and export new products. Countries tend to diversify into products that are similar to their current exports [1], regions are more likely to enter industries related to those already present in the region [2, 3], and cities are more likely to patent in technology classes that are related to their previous patents [4, 5]. This “principle of relatedness” suggests that agglomeration economies lead to the easier transfer of knowledge spillovers between industries and regions. The link between the access to knowledge and diversification, however, has proven difficult to establish because the relationship is highly endogenous. Since diversification is path dependent, it is not clear whether a region’s access to a particular type of knowledge influences its future diversification path, or whether there are other long...

Recent research has shown that industrial diversification is a path dependent process, where regions build on the capabilities they already possess to adopt new industries and export new products. Countries tend to diversify into products that are similar to their current exports [1], regions are more likely to enter industries related to those already present in the region [2, 3], and cities are more likely to patent in technology classes that are related to their previous patents [4, 5]. This “principle of relatedness” suggests that agglomeration economies lead to the easier transfer of knowledge spillovers between industries and regions. The link between the access to knowledge and diversification, however, has proven difficult to establish because the relationship is highly endogenous. Since diversification is path dependent, it is not clear whether a region’s access to a particular type of knowledge influences its future diversification path, or whether there are other long term path dependencies that influence both the available knowledge and future diversification. Here we exploit the construction of the Swedish railroad network as an exogenous event that changes the knowledge available to each town by connecting them to other towns. If connectivity promotes knowledge diffusion pairs of towns that became connected by railroad should become more similar in terms of their industrial structures. Research has shown that railroad connectivity is an important motor of economic growth [6], since it promotes trade [7], increases the value of land [8], shifts labor demands [9], and increases urban population [10]. In particular, Berger and Enflo [10] show that Swedish towns that gained access to the railroad network experienced substantial relative increases in population and manufacturing employment shares. The role of transportation technologies for industrial diversification, however, remains largely unexplored. We use historical data on the industrial structures of 76 Swedish towns1 from 1865 to 1900 to show that the expansion of the railroad network led connected towns to diversify into sectors where their railroad- neighbors had specialized before. Our findings suggest that transportation technologies can provide access to the necessary knowledge to adopt new industries

Boston Lena och Janne 2018 version 2 14 juni

Lena Andersson-Skog, Umeå University; Jan Ottosson, Uppsala University, Sweden

Recently, growing interest concerning the interaction between the state and regulation of new technologies has evolved. Economic theory in the neoclassical sense have, however, not been especially helpful in giving answer to important questions regarding why the state initiate or change its policy towards new technology. Two main analytical traditions concerning the role and function of the state in the shaping of regulatory orders have dominated the discussion. The positive school emphasizes the state as the guardian of public interest, while the older versions of the normative school saw the state as captured by interest groups. However, the interrelation between the state and interest groups have lately been a matter of some discussion by social scientists, critical to the older static analysis of interest groups introduced by Olson. In the recent discussion regarding the function of interest groups, the importance of ‘defining moments’ or ‘windows of opportunity’ have been emphasized....

Recently, growing interest concerning the interaction between the state and regulation of new technologies has evolved. Economic theory in the neoclassical sense have, however, not been especially helpful in giving answer to important questions regarding why the state initiate or change its policy towards new technology. Two main analytical traditions concerning the role and function of the state in the shaping of regulatory orders have dominated the discussion. The positive school emphasizes the state as the guardian of public interest, while the older versions of the normative school saw the state as captured by interest groups. However, the interrelation between the state and interest groups have lately been a matter of some discussion by social scientists, critical to the older static analysis of interest groups introduced by Olson. In the recent discussion regarding the function of interest groups, the importance of ‘defining moments’ or ‘windows of opportunity’ have been emphasized. The possibilities of interest groups to act in political situations characterized by uncertainty and crises have been of special interest. In this respect, the learning behavior of politicians facing a new situation has recently attracted attention by political economists. Different modes of regulation are not only relatively stable institutions but old ones seem to influence the establishment of new ones as well as the process by which they are implemented. The existence of different ‘national’ modes of regulation suggest that some form of path dependence can bring us new insights to the actual process of regulation over time. These issues suggest that a path dependence approach will be of benefit in explaining various responses among politicians and private actors towards regulatory issues, but we will also discuss how to interpret institutional change. In this paper we will address the question how we understand the historical development of regulation and which conditions create the development of governance and how do such orders change. We will illuminate our argument by studying why the Swedish state choose to regulate, intervene, and subsidize network industries in different ways. By doing so, it will be possible to further interpret the windows of opportunity and the role of interest groups vs. politicians in these respects. By using the example of early civil aviation and railways special emphasis on the Swedish interwar case, we will argue that the various patterns of state involvement neither can be considered only as a case of market failure, nor only as an example of interest groups actions since the different ways actors created and acted upon ideas of the role of the state in a new transport mean and the role of the older railways shows that the initial position of state involvement was not a clear-cut matter, with possible consequences for mobility.

From Penny Black to the Bull’s Eye Brazilian Postal Reforms in the First Half of the Nineteenth Century

Pérola Maria Goldfeder Borges de Castro, University of São Paulo, Brazil

The construction of Brazilian statehood in the nineteenth century included the development of an administrative machine capable of expanding governmental authority over the territory. An analysis of institutional and financial aspects characterizing Brazilian postal reforms between 1829 and 1844 is germane to the study of how the state was consolidated. The process of postal reform exposed different attitudes toward public administration as well as different conceptions of monarchy and government.

The construction of Brazilian statehood in the nineteenth century included the development of an administrative machine capable of expanding governmental authority over the territory. An analysis of institutional and financial aspects characterizing Brazilian postal reforms between 1829 and 1844 is germane to the study of how the state was consolidated. The process of postal reform exposed different attitudes toward public administration as well as different conceptions of monarchy and government.