Transport Infrastructure, Growth and Persistence: The Rise and Demise of the Sui Canal

Abstract

This paper investigates the effect of transport infrastructure on the spatial distribution of population over two millennia. Focusing on the Sui Canal, one of history's greatest infrastructure projects, we show that its completion in the 7th century CE led to a strong increase in population concentration along the newly established transport artery. We exploit the fact that large parts of the canal fell into disrepair after the 12th century to analyze the persistence of this effect. We find that in 2010, more than 800 years after the Sui Canal fell into disuse, regions once directly connected to the canal are still more populous than areas that never had access. However, this population concentration is not mirrored in economic development. GDP per capita is lower in areas that lay along the course of the canal. One potential explanation for this finding is a change in the value of locational fundamentals as well as a shift in investments to the benefit of coastal regions since the initiation of the Open Door Policy in 1978.