Thursday, December 13, 2012

Count István Széchenyi and the Chain Bridge

Count István Széchenyi and the Chain Bridge

by Luca Drucker

The construction Chain Bridge as the first permanent bridge between Pest and Buda caused
the reduction of transport costs and helped Pest-Buda become the kind of centre Count
Széchenyi dreamed of.

If we hear the name of Count István Széchenyi we can recall a bunch of reforms he made in the Hungary of Reform Era: the foundation of the Hungarian Academy of Sciences and the Trade Bank, the National Casino, the introduction of horse racing in Hungary, the Hungarian National Economic Association, the National Theatre... However, in the aspect of regional economics, his most important contributions as transport minister were the steam ships on Lake Balaton, his plans for the first railways in Hungary, his support of making Danube navigable and the Chain Bridge.

Before the construction of Chain Bridge, in the early 18th century Danube could only be crossed between Pest and Buda by ferryboat and from 1767 via a pontoon-bridge supported by 43 boats. However, this bridge hindered the circulation of ships and it was unusable in winter because of debacles. So we can say transport costs were very high between the two cities. The idea of building a permanent bridge between Pest and Buda was relevant, and thanks to Count Széchenyi, the work started in 1939 and the bridge was opened on 20 November, 1849. The bridge was built to connect the two cities he wanted to be unified in the future and be the political, economic and cultural centre of Hungary. 

By that time Pest was flourishing: population grew, centres of trade and money were built, palaces and hotels were raised and cultural life bloomed, too. However, we cannot say this was caused by a historical accident: people invested in Pest because they wanted it to blossom and be the centre of Hungary. 

But if we think about New Economic Geography theory, maybe we can say a little bit more about the consequences of building a bridge between Pest and Buda than just that it connected the two parts of the future capital city. 

This theory is about how people decide on location between two regions with two sectors of the economy. The two sectors are agriculture and manufacturing and manufacturing labour and firms can move between regions but agricultural labour can’t. Migration decisions of manufacturing workers are affected by the wage differences between the regions, but the equilibriums are determined mainly by transport costs. With high transport costs, spreading (production in both regions) and with lower transport costs, agglomeration (production in only one region) will be the equilibrium. 

If we take a look at how population in Pest and Buda formed among the years we can see that after the reforms in transportation, mainly the construction of Chain Bridge, population in Pest grew faster than that in Buda. It is true that the area of Buda is smaller and the first geography of the two cities is different – Buda is mostly built on hills but Pest is on a plain. This is why even in the 18th century people in Buda still dealt mostly with viticulture and wine production and with industry and trade in Pest. However, maybe with the huge decline in transport costs – the construction of the bridge – people did migrate from Buda and from other Western parts to Pest because of the higher wages and better possibilities, so some kind of agglomeration started. 

This is just my theory. It may not be true. Budapest is not exactly the textbook example of this model but it is sure that building the Chain Bridge eased the trade and transportation not only between Pest and Buda but between Eastern and Western parts of the country, too. This project, among the various reforms of Count Széchenyi and followed by even more reforms in the end of the century contributed to Budapest becoming the centre he dreamed of.


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