Spain's development from a premodern society into a modern unified nation-state with an integrated economy was painfully slow and varied widely by region. Economic historians have long argued that ...high internal transportation costs limited domestic market integration, while at the same time the Castilian capital city of Madrid drew resources from surrounding Spanish regions as it pursued its quest for centralization. According to this view, powerful Madrid thwarted trade over large geographic distances by destroying an integrated network of manufacturing towns in the Spanish interior.
Studies of commercial, cultural and political networks in the Atlantic tend to juxtapose the soft ties of networks to the hard rules of imperial law and trade regulation. The implicit or explicit ...assumption has been that networks in the Spanish Atlantic served primarily as an antidote to the organisation of the empire and broke out of its spatial boundaries. Networks stood for fluidity, as opposed to the static structures of state and church. This article argues in contrast that networks not only were institutions, but that the empire’s institutions were (mostly) networks. It uses the case of the English Atlantic networks operating in northern Spain in the first half of the seventeenth century to show how our interpretation of the interactions between merchant networks and political institutions is transformed when we break up the supposed dichotomy between the two.
This article revises the traditional view of Spain as a predatory colonial state that extracted revenue from natural resources and populations in the Americas while offering little in return. Using ...eighteenth-century Spanish American treasury accounts, we show that local elites exerted important control not only over revenue collection, as previously argued by the authors, but also over expenditure allocation. The Spanish colonial state developed into a stakeholder model, in which local interests were deeply invested in the survival and expansion of empire. The means of co-optation were intra-colonial transfers, as well as credit relations between the state and colonial individuals and corporations, which guaranteed that much of colonial revenue was immediately fed back into the local economy, while minimizing enforcements costs. By allowing stakeholder control of both revenue and expenditure, Spain managed to avoid the problems faced by France, where royal control of expenditure clashed with partial elite control of revenue-raising.
Although the importance of merchant guilds for the commercial development of Europe is beyond doubt, scholars do not agree about why they emerged, persisted, and ultimately declined between the ...eleventh and eighteenth centuries. Historical studies usually focus on individual cases and idiosyncratic circumstances that restrict comparisons, whereas economic approaches based on game or contract theory often impose narrow assumptions on their models that tend to neglect two key features of these institutions: In imperfect markets, merchants used more than one institution to solve a given problem, and individual institutions often addressed more than one problem. However, a new methodological approach (maximum likelihood estimation) permits rigorous comparative analysis of the probability that merchants, under a given set of market and political circumstances, will delegate control of their dealings. This model requires only one assumption—that merchants relinquished such control only when they expected a positive return.
Social scientists use the history of Spain and her empire as a standard against which they establish the relatively superior efficiency of Anglo-Saxon institutions. This historical “experiment” ...underpins the core argument of new institutional economic history. This essay argues that such comparisons are based on a misleading characterization of Spanish rule in the metropolis and overseas. For some time, historians of Spain and colonial Spanish America have emphasized that the Spanish system of governance was highly negotiated rather than absolutist. This essay confirms this view by analyzing the workings of the peninsular and colonial fiscal systems. Revenues were not extracted to Madrid but instead were widely redistributed across regions. Contrary to received wisdom, there was a great degree of local autonomy in managing and allocating these intraregional transfers of revenues. The crown barely controlled the system; yet it acted as the ultimate arbiter of a very flexible arrangement that effected the distribution of the fiscal burden across colonial regions and economic sectors. This setup explains the lack of serious challenges from within during three hundred years of imperial rule. Napoleon’s invasion of Spain in 1808 and the abduction of the king caused a major shock to this system of redistribution. The implosion of Spanish rule led to conflict over revenues and resources among constituent parts of the empire. The ensuing search for a legitimate replacement ruler consumed the following century in postcolonial Spanish America. A comparable pattern of constitutional failure, political instability, and poor economic performance was replicated in Spain throughout the nineteenth century.
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