Infrastructure and economic growth in Spain: 1845-1935

Abstract

This thesis analyses the impact of infrastructure on Spanish economic growth during the period 1845-1935. It is aimed at overcoming two shortcomings that have characterised historians’ interpretations on the subject so far. Firstly, it adopts an aggregate approach, as opposed to most previous analyses, which focused on only one type of asset. Secondly, it offers some answers to the main ongoing debate on the matter, i.e. the conflict between the high social saving of Spanish railways and the apparent failure of the railway system, as reflected in the results of the private companies. The thesis describes the evolution of infrastructure investment over the period and shows the prominent role of railways at least until 1895. The establishment of the railway network in a relatively short period of time was the most outstanding event in the process of infrastructure construction and gave an intense boost to the Spanish infrastructure endowment. The thesis also shows that infrastructure was relatively scarce in Spain compared to other European countries. However, despite that scarcity, the response of the economy to infrastructure increases was sluggish. Apparently, although infrastructure was essential for Spanish industrialisation, the country was very slow to adapt to new conditions, due to the presence of serious constraints in other areas of the economy. These results are confirmed by the analysis of railways, as the economic impact of the Spanish railway network seems to have been very high, but to have taken a long time to be reached. In addition, the thesis also indicates that the underdevelopment of the Spanish institutions precluded adequate regulation of railway construction and operation. As a consequence, the situation of railway companies was always critical and their ability to offer an adequate service was limited. These findings shed some light on the debate on the economic role of Spanish railways.