Old but gold: Historical pathways and path dependence

Abstract

Following the discovery of gold in 1694 in Brazil, pathways were constructed to connect coastal settlements to mining regions in the unpopulated interior. While these pathways initially facilitated the creation of road towns, their influence faded by the late nineteenth century. With the mid-twentieth-century demographic and industrial transition, regions with higher historical road density experienced renewed population growth and greater migrant inflows. We argue that this resurgence reflects the role of road towns in supporting early urbanization and structural transformation. Using an extended Rosen–Roback–Glaeser framework, we estimate strong agglomeration spillovers, consistent with Brazil’s spatial economy exhibiting multiple steady states and possible historical path dependence.