A stakeholder empire: the political economy of Spanish imperial rule in America

Regina Grafe and Alejandra Irigoin

Economic History Working Papers from London School of Economics and Political Science, Department of Economic History

Abstract: This paper 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 18th century Spanish American treasury accounts we show that local elites not only exerted important control over revenue collection as argued by (Irigoin/Grafe 2006) but also over expenditure allocation. Mirroring Elliot’s characterization of the English empire as a ‘stakeholder empire’ we contend that 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 at least partial elite control of revenue raising (Velde/Weir 1992, Hoffman/Rosenthal 1997).

JEL-codes: H83 N0 O51 O52 (search for similar items in EconPapers)
Pages: 60 pages
Date: 2008-11
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Related works:
Journal Article: A stakeholder empire: the political economy of Spanish imperial rule in America (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:wpaper:22306

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