Working Paper: CEPR ID: DP16467
Authors: Leticia Abad; Noel Maurer
Abstract: The Spanish colonial empire initially faced a trilemma in the New World. First, they needed to incentivize quasi-private Spanish expeditions to subdue, settle, and secure new territories. Second, they needed labor to develop the new territories and provide a stream of rents for the imperial government. Third, they needed to ensure that the Spanish colonists did not grow powerful enough to challenge imperial authority. We show how the Spanish solved this trilemma in three ways, all involving forced labor: (1) transplanting Iberian institutions; (2) repurposing existing pre-Columbian institutions; (3) importing African slaves. We present evidence that over time forced labor in Spanish America underwent an endogenous process of decay as power slowly shifted from the Spanish-American colonial elite to indigenous labor. The end result was the increasing dominance of wage labor on the American mainland, leaving most forced labor arrangement either moribund or in decay by the time the empire collapsed. The commodity boom around the circum-Caribbean combined with geographic factors explains why this process was slower there (and short-circuited entirely in the case of Cuba).
Keywords: Labor; Coercion; Institutions; Latin America
JEL Codes: O43; J47; N36
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| forced labor systems (J47) | economic demands (J20) |
| economic conditions (E66) | decline in coercive labor practices (J47) |
| labor scarcity (J23) | coercion mechanisms (J47) |
| demographic changes (J11) | outside options for laborers (J89) |
| expansion of agricultural frontiers (N52) | outside options for laborers (J89) |
| urban economies (R11) | outside options for laborers (J89) |
| outside options for laborers (J89) | costs of maintaining forced labor arrangements (J47) |
| costs of maintaining forced labor arrangements (J47) | decline of forced labor (J47) |
| forced labor arrangements (J47) | persistence in Caribbean regions (N96) |