NEITHER ABSOLUTISM NOR NEGOTIATION: SPANISH EMPIRE BUILDING AND POLITICAL ECONOMY IN THE 18^THCENTURY CARIBBEAN

Abstract

This paper revisits the political economy during Spanish rule in America by reappraising the allegedly positive impact that intra-imperial transfers (situados) had on the Caribbean economy. It raises concerns concerning categories such as bargaining and absolutism and their accuracy in accounting for the nature of Spanish imperial rule. Three main findings are reported. Firstly, it seems inaccurate to hold that all remittances were injected into the economy with positive effects. Liquidity apparently provoked a real estate bubble. Secondly, the local market was not necessarily sensitive to the arrival of bullion. Finally, jurisdictional fragmentation allowed the king to issue debt in a disorderly fashion and with no constraints, and local officials and groups of interests to behave as free riders.

Fiscal Transfers between Buenos Aires and the Viceregal Interior at the End of the Colonial Period: Fall of the Situado and the Relation with the Regional Royal Treasuries (1800–1810)

“…In contrast, the perspective associated with the neo-institutional model of Douglas North (1990) is that negotiations between the Spanish Crown and its subjects had negative effects. This perspective especially underlines the heterogeneous, noninstitutionalized, and corporate characteristics of fiscal negotiation that resulted in the monarchy's incapacity for fiscal centralization, thus increasing financing costs and opening up opportunities to the king's discretion, above all in taking out loans (Summerhill 2008;Bohorquez 2022).…”