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Cambridge Studies in Comparative Politics
Colonialism and Postcolonial Development: Spanish America in Comparative Perspective
In this comparative-historical analysis of Spanish America, Mahoney offers a new theory of colonialism and postcolonial development. He explores why certain kinds of societies are subject to certain kinds of colonialism and why these forms of colonialism give rise to countries with differing levels of economic prosperity and social well-being. Mahoney contends that differences in the extent of colonialism are best explained by the potentially evolving fit between the institutions of the colonizing nation and those of the colonized society. Moreover, he shows how institutions forged under colonialism bring countries to relative levels of development that may prove remarkably enduring in the postcolonial period. The argument is sure to stir discussion and debate, both among experts on Spanish America who believe that development is not tightly bound by the colonial past, and among scholars of colonialism who suggest that the institutional identity of the colonizing nation is of little consequence.
424 pages, Kindle Edition
First published February 15, 2010
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September 11, 2020
Mahoney attempts to answer the question "why are some countries richer than others?" with an emphasis on postcolonial states (4). He argues that the answer depends both on the level and kind of colonialism, which are the results of the "interaction between the potentially evolving political-economic institutions of the colonizing nation and the societal institutions in the colonized territory" (xiii). The type of political-economy pursued under colonialism leads to the introduction of institutions, which serve "as distributional instruments that allocate resources unevenly and thereby help constitute asymmetrical collective actors" (15). The postcolonial development of a given colony is therefore largely a result of the collective actors created by colonial political-economic institutions.
He describes two main types of colonial political-economy: mercnatilist and liberal. Mercantilist political economy is exemplified by "state authorities [which] seek national economic self-sufficiency and organize productive activity to ensure favorable trade balances and the accumulation of precious metals." Mercantilist institutions include "a series of restrictions on trade, on property ownership, and on economic and political participation. These 'statist' regulations have major distributional consequences... the principal beneficiaries are an aligned set of political and economic elites, the latter including monopolistic merchants and wealthy landed classes. These elites sit atop and actively uphold a rigidly hierarchical society in which the vast majority cannot advance" (21). In consequence, the institutions of mercantilism cripple opportunities for economic development by accumulating power and capital in the hands of an elite minority and thereby limiting opportunities for investment and trade (19).
Liberal political economy is one in which "state authorities allow economic actors to control and use surplus capital for the purpose of stimulating comparative international advantages and long-run accumulation. Entrepreneurial investments that seek to upgrade technology and achieve competitiveness in open markets are characteristic and encouraged." To provide incentives, liberal states avoid "the most severe restriction limiting and regulating commercial interests" and discourage "institutions that explicitly privilege status groups and impose hierarchical relations" (21-22). These competitive colonies are not institutionally unequal and provide greater opportunities for investment and creative destruction that, in the modern era, has proved necessary for economic success. Thus, "level of mercantilist colonialism is negatively related to postcolonial development, whereas level of liberal colonialism is positively related to postcolonial development" (27).
Mercantilist and Liberal colonizers were drawn to different areas. "Mercantilist powers pursue[d] higher levels of colonialism in comparatively more complex precolonial regions. They [did] so because more complex indigenous societies provide[d] them with excellent opportunities for economic gain" (26). Regions with less-state like, hierarchical, and "complex" indigenous societies were both harder to incorporate into forced labor systems and less populous, and thus acted as less of a draw for mercantilist colonizers.
Liberal colonizers "pursue[d] lower levels of colonialism in more complex precolonial regions and higher levels of colonialism in more complex regions" because "more complex precolonial regions feature[d] entrenched precapitalist institutions, and these institutions [made] it difficult for liberal colonizers to achieve market-based accumulation" (27).
It goes without saying that higher levels of liberal colonialism occur in places where the settler population is large and chiefly white (especially in terms of involvement with the polis).
The majority of the book uses case studies of mainland Spanish America to test the theory. Under the Habsburgs (1492 - 1700), the Spanish Empire pursued a mercantilist political-economy, and focused its attention and institutions on areas with large indigenous populations, and either mineral wealth or proximity to Aztec or Inca civilizations (115). The Mercantilist cores were thus Mexico, Peru, and Bolivia (51, 115). Many areas of the Spanish Americas were largely ignored by the Habsburgs, and did not see the erection of mercantilist institutions or the entrenchment of a mercantilist elite.
Under the Bourbons (1700 - 1808) the political-economic orientation of the empire shifted to a liberal mode. Two paths to liberal core status existed: "in one, a previously marginal territory obtained the status of colonial center or semiperiphery because of its comparatively sparse indigenous population and strategically located port city" (183). Such was the case for Argentina, and to a lesser extent Uruguay and Venezuela. "In another path, a territory received substantial colonial attention (including settlers and institutions) because it had been a core Habsburg colonial region and continued to provide wealth via the extraction of precious metals" (183). This accounts for Mexico's continuation as a colonial periphery, but the decline of Bolivia, which had exhausted its precious mineral deposits.
A handful of colonies (Chile, Costa Rica, El Salvador, Honduras, Nicaragua, and Paraguay) were peripheries under both the Habsburgs and the Bourbons. Lacking either liberal or mercantilist institutions, the fates of these countries "depended heavily on the contingencies and eventualities of warfare" (200). While Mahoney notes that, for these countries, war certainly played a crucial role in forming the development trajectory of the state, he is careful to note that for the core countries neither the wars of independence nor the Mexican-American War appear to have redirected the trajectory of economic development established under colonialism (191). This section is exceedingly short and probably the weakest part of the book, but this does not suggest that Mahoney is wrong in the more extreme cases.
The relative levels of postcolonial development in Spanish America were established "with the varying power configuarations that were originally put in place during colonialism" (227). Though social revolutions, such as Mexico's, succeeded in erasing "important colonial legacies in the Habsburg core" by "destroy[ing] the power of large landowners", for the most part the relative economic and social prosperity of these nations is in line with colonial institutions (215).
While this book is very thought provoking, I take issue with the idea that, especially in the 16th and 17th centuries, countries had singular, coherent political-economic visions, and that those visions aligned with settler behavior. The private, independent nature of much early settlement even by England, the liberal colonizer par excellence, was geared towards finding precious minerals and large indigenous societies from whom tribute and labor could be extracted. As the 17th century wore on, dissenting political-economic traditions (including the liberal one) emerged in response to colonial development, but much early settlement was led by adventurers precisely interested in mercantilist-style short-term gains. The problem is that in English settlements the state-like indigenous societies and mineral resources failed to materialize.
Further, it seems completely plausible to me that the same state can, in different colonies, simultaneously pursue different political-economic orientations. Certainly Massachusetts Bay and New York were commercially-oriented mercantile colonies. But were the British West Indies, with their monoculture, large enslaved population, narrow elites, and (until the late 18th century) sugar monopoly, not mercantilist? What of the southern mainland colonies, where Virginia tobacco and "Carolina gold" (rice) created similarly hierarchical, oppressive, economically stagnant populations? In the 19th century, could we call Australia "liberal" and Anglo-Africa "mercantilist"? If this is the case, it makes little sense to talk of a state being either liberal or mercantilist - rather, states can be liberal in areas conducive to liberal political economy and mercantilist in areas conducive to that. Indeed, Whigs and Tories had radically different imperial visions (which map nicely onto Mahoney's dichotomy) but coexisted and frequently seized power from one another - possibly colonizers with strong democratic institutions were more likely to oscillate between liberal and mercantilist colonial acquisitions, leading to a mixed empire.
He describes two main types of colonial political-economy: mercnatilist and liberal. Mercantilist political economy is exemplified by "state authorities [which] seek national economic self-sufficiency and organize productive activity to ensure favorable trade balances and the accumulation of precious metals." Mercantilist institutions include "a series of restrictions on trade, on property ownership, and on economic and political participation. These 'statist' regulations have major distributional consequences... the principal beneficiaries are an aligned set of political and economic elites, the latter including monopolistic merchants and wealthy landed classes. These elites sit atop and actively uphold a rigidly hierarchical society in which the vast majority cannot advance" (21). In consequence, the institutions of mercantilism cripple opportunities for economic development by accumulating power and capital in the hands of an elite minority and thereby limiting opportunities for investment and trade (19).
Liberal political economy is one in which "state authorities allow economic actors to control and use surplus capital for the purpose of stimulating comparative international advantages and long-run accumulation. Entrepreneurial investments that seek to upgrade technology and achieve competitiveness in open markets are characteristic and encouraged." To provide incentives, liberal states avoid "the most severe restriction limiting and regulating commercial interests" and discourage "institutions that explicitly privilege status groups and impose hierarchical relations" (21-22). These competitive colonies are not institutionally unequal and provide greater opportunities for investment and creative destruction that, in the modern era, has proved necessary for economic success. Thus, "level of mercantilist colonialism is negatively related to postcolonial development, whereas level of liberal colonialism is positively related to postcolonial development" (27).
Mercantilist and Liberal colonizers were drawn to different areas. "Mercantilist powers pursue[d] higher levels of colonialism in comparatively more complex precolonial regions. They [did] so because more complex indigenous societies provide[d] them with excellent opportunities for economic gain" (26). Regions with less-state like, hierarchical, and "complex" indigenous societies were both harder to incorporate into forced labor systems and less populous, and thus acted as less of a draw for mercantilist colonizers.
Liberal colonizers "pursue[d] lower levels of colonialism in more complex precolonial regions and higher levels of colonialism in more complex regions" because "more complex precolonial regions feature[d] entrenched precapitalist institutions, and these institutions [made] it difficult for liberal colonizers to achieve market-based accumulation" (27).
It goes without saying that higher levels of liberal colonialism occur in places where the settler population is large and chiefly white (especially in terms of involvement with the polis).
The majority of the book uses case studies of mainland Spanish America to test the theory. Under the Habsburgs (1492 - 1700), the Spanish Empire pursued a mercantilist political-economy, and focused its attention and institutions on areas with large indigenous populations, and either mineral wealth or proximity to Aztec or Inca civilizations (115). The Mercantilist cores were thus Mexico, Peru, and Bolivia (51, 115). Many areas of the Spanish Americas were largely ignored by the Habsburgs, and did not see the erection of mercantilist institutions or the entrenchment of a mercantilist elite.
Under the Bourbons (1700 - 1808) the political-economic orientation of the empire shifted to a liberal mode. Two paths to liberal core status existed: "in one, a previously marginal territory obtained the status of colonial center or semiperiphery because of its comparatively sparse indigenous population and strategically located port city" (183). Such was the case for Argentina, and to a lesser extent Uruguay and Venezuela. "In another path, a territory received substantial colonial attention (including settlers and institutions) because it had been a core Habsburg colonial region and continued to provide wealth via the extraction of precious metals" (183). This accounts for Mexico's continuation as a colonial periphery, but the decline of Bolivia, which had exhausted its precious mineral deposits.
A handful of colonies (Chile, Costa Rica, El Salvador, Honduras, Nicaragua, and Paraguay) were peripheries under both the Habsburgs and the Bourbons. Lacking either liberal or mercantilist institutions, the fates of these countries "depended heavily on the contingencies and eventualities of warfare" (200). While Mahoney notes that, for these countries, war certainly played a crucial role in forming the development trajectory of the state, he is careful to note that for the core countries neither the wars of independence nor the Mexican-American War appear to have redirected the trajectory of economic development established under colonialism (191). This section is exceedingly short and probably the weakest part of the book, but this does not suggest that Mahoney is wrong in the more extreme cases.
The relative levels of postcolonial development in Spanish America were established "with the varying power configuarations that were originally put in place during colonialism" (227). Though social revolutions, such as Mexico's, succeeded in erasing "important colonial legacies in the Habsburg core" by "destroy[ing] the power of large landowners", for the most part the relative economic and social prosperity of these nations is in line with colonial institutions (215).
While this book is very thought provoking, I take issue with the idea that, especially in the 16th and 17th centuries, countries had singular, coherent political-economic visions, and that those visions aligned with settler behavior. The private, independent nature of much early settlement even by England, the liberal colonizer par excellence, was geared towards finding precious minerals and large indigenous societies from whom tribute and labor could be extracted. As the 17th century wore on, dissenting political-economic traditions (including the liberal one) emerged in response to colonial development, but much early settlement was led by adventurers precisely interested in mercantilist-style short-term gains. The problem is that in English settlements the state-like indigenous societies and mineral resources failed to materialize.
Further, it seems completely plausible to me that the same state can, in different colonies, simultaneously pursue different political-economic orientations. Certainly Massachusetts Bay and New York were commercially-oriented mercantile colonies. But were the British West Indies, with their monoculture, large enslaved population, narrow elites, and (until the late 18th century) sugar monopoly, not mercantilist? What of the southern mainland colonies, where Virginia tobacco and "Carolina gold" (rice) created similarly hierarchical, oppressive, economically stagnant populations? In the 19th century, could we call Australia "liberal" and Anglo-Africa "mercantilist"? If this is the case, it makes little sense to talk of a state being either liberal or mercantilist - rather, states can be liberal in areas conducive to liberal political economy and mercantilist in areas conducive to that. Indeed, Whigs and Tories had radically different imperial visions (which map nicely onto Mahoney's dichotomy) but coexisted and frequently seized power from one another - possibly colonizers with strong democratic institutions were more likely to oscillate between liberal and mercantilist colonial acquisitions, leading to a mixed empire.
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