This essay examines three recent historical approaches to the political economy of Latin America's relative economic backwardness. All three locate the origins of contemporary underdevelopment in defective colonial institutions linked to inequality. The contrasting view offered here affirms the significance of institutional constraints, but argues that they did not arise from colonial inequalities, but from the adaptation of Iberian practices to the American colonies under conditions of imperial weakness. Colonial inequality varied across the Americas; while it was not correlated with colonial economic performance, it mattered because it determined the extent of elite resistance to institutional modernisation after independence. The onset of economic growth in the mid to late nineteenth century brought economic elites to political power, but excluding majorities as inequality increased restrained the region's twentieth-century growth rates and prevented convergence.

The economic history of Latin America has become more voluminous, complex, and fascinating in the past decade. 1 The new work has already provoked noteworthy commentaries; one could even write an historiography of the historiography. 2 The purpose of this essay is to comment on (and applaud) the re-emergence of political economy in the economic history of the region. By this I mean the renewal of interest in the Big Questions that inspired the structuralists, "cepalinos," Marxists, dependentistas, and modernizationists of the post-World War II generations. Economic historians are again worrying about the long, long run, about the connections between social stratification, political power, and economic strategy, and about the relative impact of structures, endowments, and institutions on economic growth and development.This essay first reviews what economic historians take as their key dependent variables, that is, the productivity of economies and the welfare of the people who make them work. We know much more now than we did only a decade or so ago about the evolution of gross domestic product (GDP) per capita and changes in living standards over the past several centuries. Second, it touches on the subject that Joseph Love addresses at greater length in his contribution to this issue, namely, the rise 1. Four collections of varying scope provide a representative sample: Stephen Haber, ed.,

Paper to be presented to an IDB conference on Economic Integration in the Americas: Prospects and Policy Issues (Punta del Este, November 2002). Much of the tariff data used in this paper has been taken from a collaboration between the second author and Michael Clemens, and we are grateful to the latter for allowing us to use that data here too. We have also received superb research assistance from Chris Blattman and István Zöllei. In addition, we have benefitted from conversations with

The contribution of railroads to economic growth in the nineteenth century depended on two critical variables: unit savings in transport costs the railroads made possible and the quantity of passengers and freight the railroads attracted. Unit savings depended mainly on geography; either cheap water transport existed before the railroads or it did not. Unit savings depended secondarily on the value of the time the railroads saved and on the flexibility in selection of routes made possible by the new technology. The quantities of passengers and freight actually transported depended on two interrelated factors: the prior development of the economy and its responsiveness to cheaper transport.

This article reports a fact that has not been well appreciated: tariffs in Latin America were the world's highest long before the Great Depression. This is a surprising fact, given that Latin America is believed to have exploited globalisation forces better than most regions before the 1920s, and given that the 1930s have always been viewed as the critical decade when Latin American policy became so anti-global. The explanation does not lie with imagined output gains from protection in these young republics, but rather with state revenue needs, strategic responses to trading partner tariffs and a need to compensate globalisation's losers.