# Inland Navigation

## Definition

The system of navigable rivers, canals, and waterways that enables water-borne transport of goods within the interior of a country. Smith identifies inland navigation as a primary determinant of early economic development, arguing that civilisations with extensive river systems and canals (Egypt, Bengal, China) developed agriculture and manufactures earlier than those without. The key economic function is to extend the effective market to inland areas that would otherwise be limited to costly land-carriage.

## Source Chapter

Book 1, Chapter 3: "That the Division of Labour is Limited by the Extent of the Market"

## Context

Smith devotes the latter half of the chapter to demonstrating that historically early civilisations — Egypt along the Nile, Bengal along the Ganges, eastern China along its river systems — owed their early development to the advantages of inland navigation. He contrasts these with inland Africa and Tartary, where the absence of navigable waterways left populations in "the same barbarous and uncivilized state."

## Economic Domain

Exchange

## Smith's Original Wording

> "The extent and easiness of this inland navigation was probably one of the principal causes of the early improvement of Egypt."

## Modern Interpretation

This concept foreshadows modern analysis of how infrastructure endowments shape long-run economic development. The geographical determinism in Smith's argument has been formalised in work by scholars like Gallup, Sachs, and Mellinger on how access to navigable waterways correlates with economic outcomes.
