An Empire of Debts? Spain and Its Colonial Realm

This chapter shows that by the eighteenth century, Spain had developed in its colonies a system based on religious endowments, merchant guilds, and a transfer network of public monies that proved an effective way to politically negotiate, credit-finance, and execute the necessary intertemporal and interspatial transfers to sustain a vast territorial empire while burdening the central state with surprisingly little formal debt for a power of that size. Spain and its empire thus had a very different public debt regime than contemporary Britain or France. The chapter thus concludes that imposing such an Anglo-French-centric normative view of public finance was precisely the source of the financial and fiscal woes of Latin American republics in the nineteenth century.