Why does Iceland have no railroads?

Iceland does not have a railroad system, a fact often attributed to the country's historic isolation, its small market size, and the challenges posed by its rugged geography.1

Historically, Iceland relied on horses for transportation, as roads were virtually nonexistent before the 20th century. Today, the country compensates for the lack of rail infrastructure through an extensive network of roads—including the Ring Road—and a robust reliance on air travel and merchant marine shipping to connect its communities and facilitate trade.1