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Without coal in the age of steam and dams in the age of electricity : An explanation for the failure of Portugal to industrialize before the Second World War

Henriques, Sofia LU and Sharp, Paul LU (2018) In Lund Papers in Economic History. General Issues
Abstract
We provide a natural resource explanation for the divergence of the Portuguese economy relative to other European countries before the Second World War, based on a considerable body of contemporary sources. First, we demonstrate that a lack of domestic resources meant that Portugal experienced limited and unbalanced growth during the age of steam. Imports of coal were prohibitively expensive for inland areas, which failed to industrialize. Coastal areas developed through steam, but were constrained by limited demand from the interior. Second, we show that after the First World War, when other coal-poor countries turned to hydro-power, Portugal relied on coal-based thermal-power, creating a vicious circle of high energy prices and... (More)
We provide a natural resource explanation for the divergence of the Portuguese economy relative to other European countries before the Second World War, based on a considerable body of contemporary sources. First, we demonstrate that a lack of domestic resources meant that Portugal experienced limited and unbalanced growth during the age of steam. Imports of coal were prohibitively expensive for inland areas, which failed to industrialize. Coastal areas developed through steam, but were constrained by limited demand from the interior. Second, we show that after the First World War, when other coal-poor countries turned to hydro-power, Portugal relied on coal-based thermal-power, creating a vicious circle of high energy prices and labor-intensive industrialization. We argue that this was the result of (i) water resources which were relatively expensive to exploit; and (ii) path-dependency, whereby the failure to develop earlier meant that there was a lack of capital and demand from industry. (Less)
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author
and
organization
publishing date
type
Working paper
publication status
published
subject
keywords
Industrial Revolution, natural resources, coal, electrification, energy prices, N1, N5, N7, O13, Q4
in
Lund Papers in Economic History. General Issues
issue
2018:185
pages
39 pages
language
English
LU publication?
yes
id
4ad0f009-5904-4c06-bc49-bd29bb8212e4
date added to LUP
2018-12-18 10:54:24
date last changed
2018-12-18 10:54:24
@misc{4ad0f009-5904-4c06-bc49-bd29bb8212e4,
  abstract     = {We provide a natural resource explanation for the divergence of the Portuguese economy relative to other European countries before the Second World War, based on a considerable body of contemporary sources. First, we demonstrate that a lack of domestic resources meant that Portugal experienced limited and unbalanced growth during the age of steam. Imports of coal were prohibitively expensive for inland areas, which failed to industrialize. Coastal areas developed through steam, but were constrained by limited demand from the interior. Second, we show that after the First World War, when other coal-poor countries turned to hydro-power, Portugal relied on coal-based thermal-power, creating a vicious circle of high energy prices and labor-intensive industrialization. We argue that this was the result of (i) water resources which were relatively expensive to exploit; and (ii) path-dependency, whereby the failure to develop earlier meant that there was a lack of capital and demand from industry.},
  author       = {Henriques, Sofia and Sharp, Paul},
  language     = {eng},
  note         = {Working Paper},
  number       = {2018:185},
  series       = {Lund Papers in Economic History. General Issues},
  title        = {Without coal in the age of steam and dams in the age of electricity : An explanation for the failure of Portugal to industrialize before the Second World War},
  url          = {https://lup.lub.lu.se/search/ws/files/55620760/Working_Paper_version.pdf},
  year         = {2018},
}