Infrastructure and institutions: Lessons from history*

Many studies quantify the effects of infrastructures on economic welfare in the past with the aim of informing policy makers today. A different group of historical studies examines how infrastructures came about and how they were financed. These latter studies often highlight the role of the franchise and democracy. In this essay, I review historical studies on infrastructure and institutions, especially formal political constraints. One consistent finding is that policies to fund and place infrastructure in locations largely reflect the aims of those in power or with greater political influence. This illustrates one of the channels by which political institutions ultimately affect economic development. History offers a range of lessons, more of which can be uncovered through future research.