Two centuries after independence, is colonialism still a valid explanation for Spanish America’s inequities and lagging economic performance? This chapter makes the case that the legacies of colonialism run at a deeper and much more local level than commonly acknowledged and publicly discussed. In particular, factoring-in the administrative practices of the Spanish Empire reveals how eighteenth-century office-selling undermined local governance in numerous ways: Shaping the spatial distribution of authoritarian and ethnic enclaves; the recurrence of violent conflict in certain areas; and ultimately, the under-provision of public goods leading to subnational differences in living standards we observe today. The chapter also outlines the limits of current explanations – focused on factor endowments, national institutions, or postcolonial state-building – to explain local-level differences. The chapter concludes with a roadmap describing the rest of the book.

The final chapter brings the findings to the current context of Spanish American countries. Two centuries after independence, rural conflict is a rarer occurrence than in the 1800s; yet, the spatial segregation of indigenous minorities and the limits to political representation remain. Relying on contemporary data from Bolivia, Chile, Colombia, Ecuador, Guatemala, Mexico, and Peru, the chapter shows that subnational territories with more intense office-selling in the past exhibit greater childhood malnutrition and stunting as well as low weight at birth. This is unlikely to be driven by alternative factors – such as the mere presence of indigenous populations or postcolonial developments – as the differences are visible with fine-level data only comparing localities straddling the borders of former colonial jurisdictions. Sides of the border with greater venality have today lower public good and economic well-being vis-a-vis neighboring ones, consistent with effects running through local governance. The chapter closes with a discussion of the implications of these findings for the study of corruption; the Spanish Empire; as well as for understanding other contexts where office-selling also took place (China, France, and Iran).

This chapter examines the effectiveness of Chinese development finance. At the recipient-country level, we test the impact of Chinese development finance on economic growth, infant mortality, and the spatial concentration of economic activity. We then move below the country level and investigate the economic development effects of China’s development finance at the subnational level using luminosity data at fine spatial resolution (in addition to infant mortality and spatial concentration). We disentangle differences between Chinese aid and debt and compare these effects to those of World Bank funding. In addition, this chapter analyzes whether the motivational forces that shape the provision of Chinese development finance affect downstream development outcomes in recipient countries and regions. The empirical evidence presented in the chapter shows that, irrespective of political bias, Chinese aid and debt improve socio- economic outcomes at both national and subnational scales. However, these impacts vary significantly across jurisdictions. We also find that socio-economic impacts of Chinese development projects are comparable, if not superior, to those generated by the World Bank.