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An Estimation of the National Economy's Losses Caused by the Priority in Developing a Railway System in Russia

Alexei A. Belyakov
An Estimation of the National Economy's Losses Caused by the Priority in Developing a Railway System in Russia in the Second Half of the 19th Century. An Attempt of Counterfactual Simulation,
in: Ekonomicheskaja istorija. Ezhegodnik (Economic Hystory. Yearbook). 2001, Moscow: ROSSPEN, 2002, p.399-417.

Summary
This article proposes counterfactual model of Russian transport system in the second half 19th century. This model studies possible benefits from priority development of water-transport network. According to the author's calculation, national economy's losses caused by priority development of railway network from 1855 to 1905 amounted up to 15 billion rubles due to noticeably larger capital and operational outlays of railway system development. These losses were distributed between Treasury (increase of public debt) and population (bankruptcy of peasants). If savings gained from prior water-transport development were invested in railway system, by the end of 1905 the presumable total length of railway system would exceed actual more than 2,5 times. The author draws the conclusion that the priority to develop a railway system in Russia at that time caused considerable damage to the national economy, while the priority of developing a water-transport network would promote economic growth and development of transportation system.