New Horizons in Institutional and Evolutionary Economics series
Edited by Lars Magnusson and Jan Ottosson
Chapter 3: Revisiting Railway History: The Case of Institutional Change and Path Dependence
Lena Andersson-Skog INTRODUCTION Railway history shows us that railway construction and railway policy is usually fairly stable during time, because of more or less irreversible physical, economical and institutional factors which constrain possible future policy outcomes. The magnitude of the investment required to construct an integrated national or even international, transport system, contribute to this development. Here, the assumption of path dependence, that pre-existing institutional structures or former decisions influence later or contemporary policy outcomes, are close in explaining the outcome of institutions and performance. A least common denominator in a definition of a path-dependence approach would be that early developments have profound and disproportionate effects on later developments (Arthur, 1994; David, 1985, p. 332; North, 1990, p. 94; Pierson, 2004, p. 44ff). Many decisions become almost irreversible, because high transformation costs and vested interests rule out other, and in some cases more efficient, institutions or policies. All policy outcomes are thus not equally plausible. Some have claimed that the notion that past experience and behavior influences present or future outcomes is ‘as old as the writing of history’ (Mowery and Rosenberg, 1998, p. 170). Put as broadly as this, path dependence can only serve as a philosophical truism: history matters. From this point of view, the concept of path dependence has a somewhat deterministic ring to it, and the risk of ruling out the possibilities for historical contingencies and institutional change is obvious. The basic argument developed here, is that some of the significant fields to focus on in...
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