Roads or Airlines?

Albert Hirschman is often asked by the leaders of poor countries, “Should we put our limited resources into roads or into airlines?” When this question is asked, the natural impulse of an economist is to say “roads”, because the money spent on roads benefit all classes of society. In contrast, the building of a national airline requires the import of foreign technology, and the airline benefits only the minority of citizens who can before to use it. Nevertheless, long experience in Africa and Latin America has taught Albert that “roads” is usually the wrong answer.

In the real world, roads have several tags. The money assigned to road-building tends to fall into the hands of corrupt local officials. Roads are easier to build than too maintain. And when, as usually happens, the new roads decay after a few years, the decay is gradutal and does not create a major scandal. The end-result of road-building is that life continues as before. The economist who said “roads” has achieved little except a small increase in the wealth and power local officials.

Contrast this with the real-world effect of building a national airline. After the money is spent, the country is left with some expensive airplanes, some expensive airports, and some expensive modern equipment. The foreign technicians have left and local people must be trained to operate the system. Unlike roads, airplanes do not decay gracefully. A crash of airliner is a highly visible event and brings unacceptable loss of prestige to the rulers of the country. The victims tend to be people of wealth and influence, and their deaths do not pass unnoticed. The rulers have no choice. Once they own an airplane, they are compelled to see to it that the airline is competently run. They are forced to create a cadre of highly motivated people who maintain the machines, come to work on time, and take pride in their technical skills. As a result, the airline brings to the country indirect benefits that are larger than its direct economic value. It creates a substantial body of citizens accustomed to strict industrial discipline and imbued with a modern work ethic. And these citizens will in time find other useful things to do with their skills besides taking care of planes.

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