Trade contraction and economic regression: the Paraguayan economy under Francia, 1814-1840
I argue here that economic activity fell considerably in the first three decades of Paraguay's early national period, below levels it had attained in the late colonial period and would attain again only after the mid-nineteenth century. I attribute this economic depression primarily to regional political fragmentation and the institutional regression it triggered. In the 1810s, the United Provinces of the River Plate sought to keep the former Viceroyalty of the River Plate under a single federal government, but failed to prevent Paraguay's early secession. Their subsequent trade blockades and military threats had profound economic and political effects on Paraguay: revenues from foreign trade taxation fell, scale economies in defence and justice provision vanished, a standing army emerged, government budget deficits worsened, mercantilist regulations heightened, the fiscal burden increased, and transactions costs generally rose. Proponents of federation, more representative governments, and freer trade progressively declined, while supporters of secession, political absolutism, and government regulation became ever more prominent. In the 1820s, blockade relaxations exacerbated economic intervention by the state, which substantially redistributed property rights in land towards itself. In the 1830s, renewed blockading had more than proportional negative effects on economic activity, which remained below late colonial levels at least until international waterways became freely navigable shortly after mid-century. Colonial absolutism and mercantilism may be said to have been restored with a vengeance. Long-run economic performance worsened.
|Date of creation:||1994|
|Publication status:||Published in Journal of Latin American Studies 3.26(1994): pp. 539-595|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:27353. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.