Path Dependence
...are more choices with it inferring the likelihood of modifications in the path that may be made possible. There were many events in history that have involved the theory of Path Dependence as well. One can look at it this way; in a country you have a government and an economy so, almost always, anything that one does is gong to involve the other. A government needs and economy to function and as does the economy need the government. Two of the many connections that Path Dependence has with the early years of the American government will be shown in the following paragraphs. An example that connects Path Dependence with the early years of American government is not known to many people being that it is not as obvious as other connections. During the earlier years of American government, the railroad was invented. Of course, in other countries, there were similar means of transportation as the railroad such as the coal carts, but nothing was as vast as the railroad would turn out to be in America. The early Americans did have the coal cars, but they were too small and took too long to transport the coals to the various destinations. While it was taking more time, the transporting of the coal was costing more money as well. This is where the railroad and railway came in with it’s larger cars and faster ability to transport the coal to the destinations. This does not describe the path dependence; what does is the size of the gauge that was used to lay the tracks for the cars to run on. In Britain, an engineer that went by the name of George Stephenson, had developed the gauge that was and is currently used all over the world which measures four feet and eight and a half inches. George Stephenson was the person responsible for setting the conditions for this example of Path Dependence in America during the mid-nineteenth century. Even though, many other engineers may have had ideas of different sized gauges, America has stayed on the path and kept the inferior four foot eight and a half inch gauge. The gauge that was set by Stephenson, was already paid for and if more was needed this gauge was less expensive than those that may have been more favorable for the railway system. It would be more expensive if the country had decided to change the gauges and even more trouble if each division of the railway system decided to use their own gauges even though it would never work. If each division had used gauges they had like more, it would never work because the tracks have to be of the same gauges in order for the trains to operate on them. The wheels fit onto the gauge and this is what keeps them on track, and if everyone had used different gauges the wheels on the trains would not fit to every one of the. Another aspect that proves the theory of Path Dependence is the fact of increasing returns that are received from choosing the path of Stephenson’s gauges. By using the same gauge and being consistent with it, costs are conserved and both service and quality are enhanced. These are two of the three conditions if path dependence known as technical interrelatedness and increasing returns. The third condition is of a changing cost instead of a conserved one. When out all together, these three conditions may, most likely, lend stability to a specific path of outcomes, that “lock in” a certain feature of the economy, such as this gauge used by Stephenson. The railway track gauges are just an example of how ‘accidental” or “contingent” events or conditions can affect the choice of technique. With at least six different gauges coming into the picture, much diversity arose, but America stayed on the path that they had originally chosen. This diversity of the gauges were a result of many different factors such as limited planning for the future, the search for an improved railway system, and historical accidents. These railway systems in the beginning years of their development were mainly intended for the sole purpose of serving local traffic or regional transportation needs, and no one had thought of the importance that w...