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Dan Bogart on Private vs. Public Ownership of Railroads Economics Faculty: Dan Bogart

A seminar last Monday, October 23, 2006, that I am sorry I missed (I was in a committee meeting). Dan Bogart from UC Irvine:

Dan Bogart (2006), "Private Ownership and the Development of Transport Systems: Cross-country Evidence from the Diffusion of Railroads in the 19th Century" http://orion.oac.uci.edu/~dbogart/bogart_railprivate_10_6_2006.pdf:

Railroads played a key role in 19th century economic growth, particularly in middle to low income countries. Despite their high benefits, there were large differences in railroad diffusion across countries. This paper investigates whether the degree of private ownership can explain the cross-country differences in railroad diffusion and investment. It uses a new data set on the number of track miles owned by private companies in over 40 countries, provinces, or colonies between 1840 and 1912. The initial results show that greater private ownership increased railroad miles per capita and railroad investment per capita after controlling for GDP per capita, political institutions, as well as country and year fixed effects. The findings address the historical and contemporary debate about the merits of public versus private ownership. Most countries in the 19th century faced a choice between direct funding through public ownership or private ownership with indirect funding through government subsidies. My findings suggest that countries which had greater private sector participation tended to have higher railroad diffusion and investment.