In Praise of Roads

Historians attribute Rome’s extensive network of roads to be one of the main factors behind its growth and stability. With 400,000 kilometers of roads, including more than 80,000 kilometers of paved highways, Rome was well connected with its most faraway provinces and vassals. The Incas also used a system of roads to integrate its vast Andean empire—with more than 25,000 kilometers of paved thoroughfares. Military leaders were always enamoured of them as conduits to move men and equipment. Indeed, President Dwight Eisenhower pushed for the creation of the U.S. Interstate Highway System after seeing how effectively the autobahns moved German soldiers and tanks. Indeed, the original name of the legislation package was the National Interstate and Defense Highways Act of 1956. In spite of its defense features, such as providing long straightaways to allow the Air Force to use them as backup airstrips, the highway system helped mobilize the country’s massive resources. The automobile industry in Detroit lobbied hard for the legislation, and it helped wean the public off mass transportation. Nevertheless, it provided North American companies with the economies of scale needed to take on the global marketplace.

Transportation can be a huge component of total production costs. Depending on the type of goods, transportation can be a huge multiple of initial production costs. This is why taking measures to improve transportation infrastructure can have such a large impact on a country’s efficiency and productivity. Moreover, better transportation improves factor mobility, allowing economic agents to more effectively mobilize land, labor and capital. Improvements in factor mobility contribute to economic growth and prosperity. Of course, not everyone may be in favour of better transportation. Poor mobility allows entry barriers to remain high, thus providing local producers with the ability to charge higher prices and provide poorer quality services and goods. During the past decade, countries such as Spain and China turbocharged their economies by modernizing the roads that connected the hinterland. Trips that used to take days can now be completed in hours. Interestingly, Latin America, one of the last bastions of antiquated road networks is in the midst of a major revolution.

Some of the most lasting legacies of former Chilean President Ricardo Lagos were the roads that he inaugurated while he was Minister for Public Works. Although many people believed that this was mainly a ploy to launch his presidential campaign, it significantly boosted his country’s productivity. The 4,300 kilometers from one end of the Chile to the other made it difficult to integrate, but its problems were relatively easy to solve. A narrow country, whose widest breadth is 240 kilometers, a spinal trunk could connect the entire length. Unfortunately, the transportation obstacles in the other countries were not so simple. Many of them have torturous mountain ranges, dense jungles or extensive wetlands. Mexico and Venezuela were probably the first countries to address the problem. Mexico built a notorious system of concession roads during the early 1990s that ended in disaster for many investors. Venezuela’s oil boom of the 1970s left it with a legacy of decent roads. However, there was still much that had to be done. Fortunately, many countries are finally starting to tackle the issue. For the first time in its history, Colombian are not being forced to play games of chicken with oncoming trucks as they navigate the one-lane highways that span the country. New two lane highways are providing greater safety and reducing travel time. The same thing is happening in Peru, where new roads are slashing the travel time to secondary cities, such as Trujillo and Arequipa, thus allowing more products and services to be delivered. Moreover, the IIRSA highway system is penetrating deep into the Peruvian jungle, bringing modernity to forgotten parts of the countryside. Better access is allowing backwaters of poverty, such as Ayacucho, to get more of its products to market, attract more tourism and generate more economic activity. The interesting thing is that Ayacucho was once the cradle of Shining Path, and now the appeal of such radical movements is fading away. The construction of new roads is also improving international trade and transportation. Although still slow, some migrant workers travel between Lima and Buenos Aires by bus. The construction of new roads will not only improve the region’s economies, but it will lead to political stability. Therefore, the next time you see a new ribbon of asphalt cutting through the countryside, you are witnessing the conduit to progress and modernity.