British overseas railway investment and economic development: The Colombian National Railway Company and its impact on the Colombian interior

Abstract

This study explores the financial performance and economic impact of British investment in the Colombian National Railway Company, the largest British direct investment in Colombia during the first period of globalisation. It aims to ascertain the railway’s impact on the regional economy and explain why it failed as a going concern. It explores three dimensions: the use of guaranteed railway bonds, the financial performance of the company, and the economic impact within different sectors of the local economy. The article implements existing methods such as financial analysis, internal rate of return, social savings, counterfactual analysis, and tailors these to a case study methodology for a micro business history of a single company. The article provides three main conclusions. Railway bond guarantees were critical to completion of the railway but detrimental to its long-term financial viability. The company was operationally profitable but stymied by construction delays. The railway contributed to growth of the export sector, internal agricultural trade, and government revenues. Contributions include tailoring the social savings method to a local rather than national focus, re-evaluation of the role of railways in Colombian economic growth, and exploring the influence of railways on internal trade within Latin American economies. Supplemental data for this article is available online at https://doi.org/10.1080/00076791.2020.1844665.This article has been corrected with minor changes. These changes do not impact the academic content of the article.