Economic Performance in the Americas

Economic Performance in the Americas

The Role of the Service Sector in Brazil, Mexico and the USA

Nanno Mulder

Economic Performance in the Americas compares the economic performances of Brazil, Mexico and the USA over the past half century. As with most other high and middle-income countries their economies are service-sector orientated and have been for several decades. This book encompasses all sectors of the economy but focuses primarily on services, analysing both the main trends in the various service industries in Brazil and Mexico and the underlying forces shaping their huge expansion.

Chapter 4: Transport and Communications

Nanno Mulder

Subjects: economics and finance, industrial economics


TRANSPORT AND COMMUNICATIONS IN THE LAST TWO CENTURIES The transport systems of Brazil, Mexico and the USA have improved enormously in the last two centuries. As the cost of freight and passenger transport dropped, geographical concentration of production and consumption became less necessary, which favoured the development of new regions. In addition to declining costs, the speed of transport increased rapidly, safety increased, as did the comfort of passenger travel. Before the construction of railways in the late nineteenth century, improvements in transport in Brazil and Mexico were limited to minor road construction. In the USA, on the contrary, massive building of roads and canals fiom the late-eighteenth to the mid-nineteenth century decreased transport costs and favoured trade among urban centres. The major developments in rail, road, water and air transport are discussed below, and their impact on transport costs is also analysed. Developments in communications are also analysed. Transport Railways Railway construction started in the USA about half a century earlier than in Brazil and Mexico, with the inauguration of a track connecting Baltimore and Ohio in 1830. Most US construction was financed by private capital, attracted by high profit margins. The US government encouraged railway expansion by lavish grants of public lands to the private companies. In Brazil most railway building was done by British investors, who received subsidies and fixed profit payments fkom the government. The Mexican government favoured railway construction by granting concessions to state governments who passed these on to mostly US investment companies. These...

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