Abstract
Social scientists use the history of Spain
and her empire as a standard against which they have sought to establish the
relatively superior efficiency of Anglo-Saxon institutions. This historical
‘experiment’ underpins the core argument of new-institutional economic history.
This paper argues that such comparisons have departed from a misleading
characterisation 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 is confirmed in the workings
of the peninsular and colonial fiscal systems. This paper shows that revenues
were not extracted to Madrid but instead widely
re-distributed across regions. Contrarily to received
wisdom there was a great degree of local autonomy in managing and allocating
these intra-regional transfers of revenues. The crown barely controlled the
system; yet, it acted as the ultimate arbiter of a very flexible arrangement
that effected ultimately the distribution of the fiscal burden across colonial
regions and economic sectors. This set-up explains the lack of serious
challenges from within during 300 years of imperial rule. Napoleon’s invasion
of Spain
in 1808 and the abduction of the Spanish 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 search for a
legitimate replacement ruler that ensued consumed the following century in
postcolonial Latin America.
A comparable pattern of constitutional failure, political instability – and
poor economic performance – was replicated in Spain
throughout the nineteenth century.