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Growth under Extractive Institutions? Latin American Per Capita GDP in Colonial Times

  • Leticia Arroyo Abad (a1) and Jan Luiten van Zanden (a1)
Abstract

This article presents new estimations of per capita GDP in colonial times for the two pillars of the Spanish empire: Mexico and Peru. We find dynamic economies as evidenced by increasing real wages, urbanization, and silver mining. Their growth trajectories are such that both regions reduced the gap with respect to Spain; Mexico even achieved parity at times. While experiencing swings in growth, the notable turning point is in 1780s as bottlenecks in production and later, the independence wars reduced economic activity. Our results question the notion that colonial institutions impoverished Latin America.

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Footnotes
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We would like to thank Alejandra Irigoin, Leandro Prados de la Escosura, Richard Salvucci, the anonymous referees, and the editor for their detailed comments, suggestions, and criticisms. Participants at Carlos III University's economic history seminar, at the Workshop on Recent Developments in Historical National Accounting, and at the 2015 World Economic History Congress were helpful as well. Leticia Arroyo Abad acknowledges financial support by the National Science Foundation and the American Philosophical Society.

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