Path dependence and Britain’s "coal wagon problem"
Scott, P. (2001) Path dependence and Britain’s "coal wagon problem". Explorations in Economic History, 38 (3). pp. 366-385. ISSN 0014-4983
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Official URL: http://dx.doi.org/10.1006/exeh.2000.0766
This article explores the nature and impact of path dependence in British rail coal haulage before 1939. It examines the factors which locked Britain's railways into a system of small coal wagons with highly fragmented ownership, the cost penalties of this system, and the reasons that attempts at modernization were unsuccessful. The analysis highlights the importance of decentralized ownership of a highly durable installed base of complementary infrastructure. Technical and institutional interrelatedness blocked incremental modernization, while the political requirement to compensate private wagon owners for the loss of their wagon stock made wholesale rationalization financially unattractive.