Development Since Independence: USA and Spanish America
Before independence, directives from the patron counties Britain and Spain drove the economic and political directions taken by the colonies in USA and Spanish America. However, for a variety of reasons, independence movements developed in USA and Spanish America. This lead a declaration of independence for 13 states in USA in 1776, and in a more gradual process independence for Central and South America viceroyalties from Spain by the 1830’s. Henceforth the USA and Spanish America colonies could decide their own fates, free as they were from the political dictates of their former mother countries.
The outcomes have been spectacularly different. USA is now a country of 50 states, and is characterised by wealth, power, and political stability. By contrast, Spanish America is a disunited collection of countries characterised by relative poverty, underdevelopment, and political instability. What has lead to such disparate outcomes? And in particular, to what extent can these differences be explained by the historical legacy left by colonialism?
Before independence Spanish America was well developed compared to USA. By the time the first colonists arrived in USA in 1607 the Spanish Crown had already established some dozen major cities, a number of universities, hundreds of churches, and set up a profitable commerce system based on gold, silver, and agricultural goods1. These achievements, combined with the natural advantages of abundant land and labour, placed Spanish America in an enviable position regarding future development. Subsequently, Spanish America did produce great wealth, mainly because of its exports of silver and agricultural goods. However, the Spanish Crown spent much of this wealth on warfare and on payments for goods that were imported to Spanish America. Those in Spanish America who benefited from this wealth were a small minority of European descent, which excluded the majority of people of mixed or native descent. Still, one estimate puts the GNP per head in 1800 at $245 for Latin America, compared to $239 per head in USA2. However, the economic development of USA since 1800 has been much more rapid compared to Spanish America. In 1990 the average GNP per head for USA was $20190 compared to $1950 for Latin America (US dollars)3.
One explanation for such differential economic development centres on the social and cultural institutions left behind by the different colonial powers4. In USA this was Britain, a nation with well developed technology, commercial systems, and surplus capital. The investment of capital from Britain, coupled with the example of development in Britain, led to a successful and rapid transition to industrialisation in USA. Furthermore, the colonial inhabitants of USA, particularly in the north, were entrepreneurial, well educated and work orientated in spirit. Spain by contrast bequeathed to Spanish America the institutions of relatively...