CoPS/IMPACT Working Paper Number G-327

Title: The Railway Gauge Muddle in Australia

Author: Nicholas Sheard


The mainline railways in Australia were initially built in three different gauges, with 'breaks-of-gauge' where passengers and goods transferred between them. This paper studies how the gauge situation affected regional development and the railway network in the 20th century. Regional breaks-of-gauge caused substantial local growth, with population and employment levels increasing by around 50% within a decade relative to otherwise similar places. However, these effects were unwound within two decades of the break-of-gauge being closed. There is little evidence for the gauge-segmented railway network causing different paces of regional development. The gauge muddle also appears to have led to a more limited railway network than if a uniform gauge had been used from the beginning.

JEL classification: H54, L92, N77, N97, R42

Keywords: Agglomeration, Rail transport, Railway gauge, Trade frictions, Transport infrastructure

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