The long-term impact of Italian colonial roads in the Horn of Africa, 1935-2015

This article exploits the quasi-natural experiment provided by the extensive road network that was built across the Horn of Africa during the Italian occupation of Ethiopia (1936-1941), to examine how a first-mover advantage in transportation can affect the spatial distribution of economic activity in developing countries over the long run. The results show that Italian paved roads rendered areas located within 10km of them significantly more populated, urbanized and luminous around 2010, relative to comparable, more distant locations. Early roadbuilding lifted first-mover locations out of isolation and allowed for net welfare gains, thanks to a reduction in transport costs and specialization. To this day, first-mover locations continue to diverge from the control group, due to a coordination mechanism that led to an oversupply of governmental facilities in the post-colonial period.