Qhapaq Ñan and Long-Term Economic Development

In the early 15th century, the Inca Empire extended along the Pacific coast and into the Andean mountains across Ecuador, Peru, northern Chile, Bolivia, upland Argentina, and southern Colombia. At its peak, the empire consisted of 12 million inhabitants from more than 100 different ethnic groups. The Qhapaq Ñan, a 30,000-kilometre-long transportation and communication system, was central to the empire’s expansion and exchange-based economy. In its construction, the location of this road system was not random but determined by social, economic, and geographical factors and patterns. What’s more, while this network was the spine of the Inca Empire, it also aided their downfall as soldiers used these roads during the Spanish conquest and colony. Given its complexity, an analysis of the Qhapaq Ñan is of interest to our economic understanding of modern development and pre-colonial forms of organization and infrastructure. 

Here, we review an NBER working paper from Ana Paula Franco, Sebastian Galiani, and Pablo Lavado, which estimates the long-term effect of the Qhapaq Ñan by examining whether residence close to the road has influenced today’s development outcomes. Development outcomes of interest are measures of schooling, labor, and health. The paper uses data from the Ministry of Culture of Peru and constructs a treatment variable that reflects whether a household is close to the route of the Qhapaq Ñan or not. The paper divides the Peruvian territory into 10 x 10 km, 20 x 20 km, and 25 x 25 km grid cells. It delimits the study area by the treatment, where grid cells crossed by the Qhapaq Ñan are the treatment group and adjacent grid cells are the control group. The regression model includes sociodemographic (such as age, gender, and ethnicity) and geographic controls (such as elevation, slope, and the distance to rivers) at the grid cell level. In addition, to satisfy the condition of the parallel trend, the paper compares grid cells with similar geographic characteristics (and thus similar agricultural productivity levels), as these are assumed to have had similar levels of development before the Qhapaq Ñan was built.

The paper finds that households within 20 km of the Qhapaq Ñan earned higher hourly wages by around 10.5 percent from 2007 to 2017. The effect of residence within the treatment cell is larger than the effect of an additional year of schooling. Similarly, a negative and significant relationship exists between child malnutrition and the treatment cell for children between 6 and 9 years of age. In 2005, attendance in a school within 20 km of the Qhapaq Ñan reduced the probability of being malnourished by 3.4 percentage points. The paper also finds that residence within the treatment cell increases schooling by 1.64 years. Franco, Galiani, and Lavado attribute this persistent effect on within-country development to the rise of formal property rights during the Spanish conquest. 

Following the defeat of the Inca Empire, the Qhapaq Ñan was used to transport and export gold and silver to Europe. Spanish settlers lived near the road by these gold and silver mining sites. Under the Spanish Crown’s formal property rights system, they were granted title to the land and the right to collect a tax in the form of labor or crops from the Indigenous peoples living on that land. On account of the Spanish Crown’s mining sites and private investment, the land closest to the Qhapaq Ñan gained greater value. Via this analysis, the paper finds that residence within 20 km of the Qhapaq Ñan significantly increased by 8.2 percentage points the probability of an individual holding property rights from 2007 to 2017. Likewise, the paper also points to access to public goods and services as another likely factor to this persistent effect. Spanish settlers promoted roads and schools in the areas where they settled; the treatment cells have an additional 18 km of road density and 48 primary schools, on average. Via this analysis, the paper finds that the provision of public goods in areas close to the Qhapaq Ñan is about 80% higher than in areas farther from it.

Beyond the legacies of colonialism on today’s economic development, further analysis into the effect of pre-colonial forms of organization and infrastructure in within-country development is necessary, as the case of the Qhapaq Ñan has shown.