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Trade, conflict, institutional reform and economic growth: The long 18th century expansion of world trade and the Iberian-American frontier


  • Pastore, Mario


The basic theorems of international trade lead economists to expect trade and autarky to result in income expansion and contraction. Likewise, world trade fluctuations may be expected to lead to fluctuations in domestic income. These theorems assume, however, that trade expansion and contraction leave the assumed domestic institutional framework unaffected. However, recent contributions to the political economy literature suggest that changing trade exposure may lead to political cleavages. One would therefore expect to see secular changes in world trade to conceivably result in domestic institutional change. The eighteenth century expansion of world trade and inter imperial conflicts, I will argue here, did in fact lead to institutional changes in both the British and Spanish empires in North and South America, respectively. Here I will consider the changes in the Spanish colonial administration known as the Bourbonic Reforms and whether they appear to have had any domestic effects in a distant, isolated province on the margins of the Spanish empire in South America.

Suggested Citation

  • Pastore, Mario, 1998. "Trade, conflict, institutional reform and economic growth: The long 18th century expansion of world trade and the Iberian-American frontier," MPRA Paper 26740, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:26740

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    References listed on IDEAS

    1. David, Paul A, 1985. "Clio and the Economics of QWERTY," American Economic Review, American Economic Association, vol. 75(2), pages 332-337, May.
    2. David, Paul A., 1967. "The Growth of Real Product in the United States Before 1840: New Evidence, Controlled Conjectures," The Journal of Economic History, Cambridge University Press, vol. 27(02), pages 151-197, June.
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    More about this item


    Changing trade exposure; trade and conflict; institutional reform; Late colonial Spanish-American economic growth; Iberian American Frontier; Paraguay; Brazil; River Plate; forced labor decline; rise of small peasantry and military obligations.;

    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • P14 - Economic Systems - - Capitalist Systems - - - Property Rights
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • N56 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Latin America; Caribbean


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