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Thursday, April 28, 2011

Cars and Roads

I'm now teaching my annual 4-week-long Spring Term course on the auto industry at Washington and Lee University, Economics 244, which will include one week in Detroit. Ironically, it has left me too busy to blog on the auto industry. So this will be short.
It's very easy in our narrow focus on the manufacturing and distribution of cars to overlook the revolutionary impact that comes from greater mobility. A note on a World Bank project in Laos highlights that. (Here's the link.)
The blog by Victoria Minoian traces the changes the follow from building a road that allows motorized access. Rural farmers can now grow vegetables for town and city markets, and not merely for own consumption. That is, they can earn a cash income. Doctors can access a village otherwise cut off on frequent occasions by high water. Children can get to school &endash; though perhaps by bicycle rather than motorized vehicle. There's little point in building good roads without motorized vehicles; but without roads, vehicles are also of little use. Of course the location of the village from which these examples were drawn reflects that constraint: it was alongside a river (the Mekong, not just a little river). The village wasn't necessary poor by local standards. But while boats and rivers make a difference, roads and motor vehicles make a bigger one.
Mike Smitka