Bourbon Reforms and State Capacity in the Spanish Empire

The Spanish colonial empire in Latin America offers insights into the effects of state formation on economic development and political institutions, with lessons for today. Spain introduced a system in the late 18th century that relied on appointed governors with total authority over an administrative unit, which greatly increased Crown revenue. The reform strengthened state presence and disrupted corruption and exploitation of indigenous communities, but also generated tension with the local elites and plausibly contributed to Latin American independence.