POLITICAL ECONOMY: Bourbon Reforms and State Capacity in the Spanish Empire; Professor Luis MARTÍNEZ (University of Chicago)

Abstract

We study state modernization and its fiscal and political consequences in the Spanish empire in the Americas in the 18th century. We focus on the intendancy system, which introduced a new corps of provincial governors to address misgovernance by local colonial officers. Our empirical strategy leverages the staggered implementation of this reform across the empire, extending from present-day USA to Argentina. Using administrative data from the royal treasuries, we show that the intendancy system led to a sizable increase in Crown revenue, driven by a strengthening of state presence far from the traditional centers of power and the disruption of local elite capture. The reform also caused a reduction in the incidence of rebellions by indigenous peoples, who were harshly exploited under the status quo. However, the intendancy system also heightened tensions with the local creole elites, as reflected by naming patterns, and plausibly contributed to the nascent independence movement.

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