Thor Berger won the Gino Luzzatto Dissertation Competition for to the best PhD Dissertation on any subject relating to the economic history of Europe, defended during the period July 2015 to June 2017
A central task for economic historians is to explain why some countries forged ahead, while others fell behind, and how some initially backward countries managed to converge with the leading industrializers in the 19th century. While these divergent growth trajectories are typically attributed to country-level differences in terms of, for example, factor prices or institutions, the vast gaps in industrialization and incomes that opened up within nations are hard to reconcile with such explanations. Against that backdrop, my dissertation analyzes regional and urban growth patterns during Sweden’s remarkable economic transformation during the half century leading up to the Great War.
As forcefully argued by Sidney Pollard, it has always been know that an industrial revolution has to be associated with a revolution in transportation. Above all, the railroad epitomized the 19th-century transport revolution to contemporary observers and the uneven spread of the emerging European railroad networks were often expected to be able to “make or break” a region. However, it has remained challenging for economic historians to identify the impact of the railroad since they often connected already rapidly growing places. In two companion chapters, I exploit the rollout of the Swedish state railroad network to identify its contribution to industrialization and short- and long-term impacts on urban growth respectively. Estimates reveal a sharp acceleration in the pace of industrialization in both cities and rural parishes that were “randomly” traversed by a railroad, while the shock of the first railroads shifted the spatial equilibrium of the urban economy that is still visible in the size distribution of cities some 150 years later.
While the railroad’s importance for Swedish economic development was emphasized already a century ago by Eli Heckscher, economic historians have more recently stressed the role of human capital in Scandinavian catch-up. Yet, it remains a puzzle how the “impoverished sophisticate” arose in the context of an extremely unequal political system, which allowed landed elites to capture local governments and block the provision of public schooling. Analyzing differences in spending across municipalities, however, show that investments in elementary education was substantially higher where local governments were dominated by landed elites, which suggests that economic and political elites were not always a barrier to educational expansions. In the final chapter, I analyze the link between agricultural productivity increases and regional growth by exploiting the potato’s introduction in the early 19th century. Evidence from welfare ratios suggest that the cheaper calories from the potato raised living standards significantly, which led to a sharp acceleration in population growth due to Malthusian adjustments in areas endowed with land suitable for potato cultivation.
A key contribution of the chapters in the dissertation is that they provide evidence of how (often minor) regional differences in terms of geography or transportation costs can be amplified to alter both short- and long-term trajectories of local economic development. At a time when regional tensions are again on the rise in Europe, the notion that economic development is not mainly a national process and that present-day patterns of regional inequality often have deep historical roots seems to be a particularly timely takeaway.