DP16467 Forced Labor in Colonial Spanish America

Author(s): Leticia Arroyo Abad, Noel Maurer
Publication Date: August 2021
Keyword(s): institutions, Labor coercion, Latin America
JEL(s): J47, N36, O43
Programme Areas: Development Economics, Economic History
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=16467

The Spanish colonial empire initially faced a trilemma in the New World. First, they needed to incentivize quasi-private Spanish expeditions to subdue, settle, and secure new territories. Second, they needed labor to develop the new territories and provide a stream of rents for the imperial government. Third, they needed to ensure that the Spanish colonists did not grow powerful enough to challenge imperial authority. We show how the Spanish solved this trilemma in three ways, all involving forced labor: (1) transplanting Iberian institutions; (2) repurposing existing pre-Columbian institutions; (3) importing African slaves. We present evidence that over time forced labor in Spanish America underwent an endogenous process of decay as power slowly shifted from the Spanish-American colonial elite to indigenous labor. The end result was the increasing dominance of wage labor on the American mainland, leaving most forced labor arrangement either moribund or in decay by the time the empire collapsed. The commodity boom around the circum-Caribbean combined with geographic factors explains why this process was slower there (and short-circuited entirely in the case of Cuba).