From Feudalism to Oligarchy in Latin America, 1500–1830
Europeans embarked upon the colonization of Latin America early in the 16th century, about 100 years before colonizing North America. Latin America seemed an auspicious choice at the time, in part because there were reports of gold and silver in the Caribbean and to the south, but also because the Caribbean and northeastern part of Brazil would prove to be promising areas for the cultivation of sugar cane. With this head start, estimated incomes in Latin America were generally higher than those in North America for the first 250 years of settlement, or until about 1750. Then, for the next 125 years, Latin America approached stagnation, while North America prospered and pulled ahead. Since about 1875, Latin America has experienced improved performance but has not achieved the convergence that economic theory would lead one to expect. What are the underlying causes of this poor economic performance over the last 250 years or so? Why has Latin America had such a hard time taking advantage of the increased opportunities in world markets, including in our own time?