Basic changes took place in Spain's institutional organization and policy orientation during the more than three centuries it held sovereignty over territories in the Americas. From the early sixteenth century until the end of the seventeenth, Spain was a great mercantilist empire, the most powerful of its kind in the world. Organized fundamentally to wage war and conquer territory, the Habsburg Empire was always in desperate need of resources, and it imposed classically mercantilist policies at home and abroad to generate them. The monarchy regulated production through guilds, restricted trade, and hoarded precious metals. And it upheld order with a stratification system that arranged citizens into a hierarchy of caste groups all ultimately beneath the king.

The rise of the Bourbon monarchy in the eighteenth century did not all at once and altogether transform Spain from a nation organized by classically mercantilist institutions to one that was enlightened and liberal. Yet during the first half of the eighteenth century, Bourbon monarchs did pursue reforms at home that centralized authority, furthered the bureaucratization of the state, and cut into the overwhelming political power of landed and ecclesiastical elites.