Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/247078 
Year of Publication: 
2019
Series/Report no.: 
EHES Working Paper No. 148
Publisher: 
European Historical Economics Society (EHES), s.l.
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.
Subjects: 
Industrial Revolution
natural resources
coal
electrification
energy prices
JEL: 
N1
N5
N7
O13
Q4
Document Type: 
Working Paper

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