History, Path Dependence and Development: Evidence from Colonial Railroads, Settlers and Cities in Kenya

Little is known about the extent and forces of urban path dependence in developing countries.  Railroad construction in colonial Kenya provides a natural experiment to study the emergence and persistence of this spatial equilibrium.  Using new data at a fine spatial level over one century shows that colonial railroads causally determined the location of European settlers, which in turn decided the location of the main cities of the country at independence.  Railroads declined and settlers left after independence, yet cities persisted.  Their early emergence served as a mechanism to coordinate investments in the post-independence period, yielding evidence for how path dependence influences development.