Hostname: page-component-7bb8b95d7b-dvmhs Total loading time: 0 Render date: 2024-09-07T16:17:59.796Z Has data issue: false hasContentIssue false
  • English
  • Français

The Sustainable Debts of Philip II: A Reconstruction of Castile's Fiscal Position, 1566–1596

Published online by Cambridge University Press:  01 December 2010

Mauricio Drelichman  and
Hans-Joachim Voth
Mauricio Drelichman*
Affiliation:
Assistant Professor, Department of Economics, The University of British Columbia, 997-1873 East Mall, Vancouver, BC V6T 1Z1 Canada; and CIFAR. E-mail: drelichm@interchange.ubc.ca.
Hans-Joachim Voth*
Affiliation:
ICREA Research Professor, Department of Economics Universitat Pompeu Fabra, Ramon Trias Fargas 25-27, 08005 Barcelona; and CREI.
Get access Rights & Permissions [Opens in a new window]

Abstract

The defaults of Philip II have attained mythical status as the origin of sovereign debt crises. We reassess the fiscal position of Habsburg Castile, deriving comprehensive estimates of revenue, debt, and expenditure from new archival data. The king's debts were sustainable. Primary surpluses were large and rising. Debt-to-revenue ratios remained broadly unchanged during Philip's reign. Castilian finances in the sixteenth century compare favorably with those of other early modern fiscal states at the height of their imperial ambitions, including Britain. The defaults of Philip II therefore reflected short-term liquidity crises, and were not a sign of unsustainable debts.

Type
ARTICLES
Information
The Journal of Economic History , Volume 70 , Issue 4 , December 2010 , pp. 813 - 842
Copyright
Copyright © The Economic History Association 2010

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

Aizenman, Joshua, and Pinto, Brian. Managing Economic Volatility and Crises: A Practitioner's Guide. Cambridge: Cambridge University Press, 2005.Google Scholar
Alvarez Nogal, Carlos. “The Role of Institutions to Solve Sovereign Debt Problems: The Spanish Monarchy's Credit (1516—1665).” Working Paper, Universidad Carlos III de Madrid, 2003.Google Scholar
Alvarez Nogal, Carlos, and de la Escosura, Leandro Prados. “The Decline of Spain (1500—1850): Conjectural Estimates.” European Review of Economic History 11, no. 3 (2007): 319–66.CrossRefGoogle Scholar
Artola, Miguel. La Hacienda del Antiguo Régimen. Madrid: Alianza, 1982.Google Scholar
Barro, Robert J.“Government Spending, Interest Rates, Prices, and Budget Deficits in the United Kingdom, 1701—1918.” Journal of Monetary Economics 20, no. 2 (1987): 221–47.Google Scholar
Bilbao, Luis María. “Ensayo de reconstrucción histórica de la presión fiscal en Castilla durante el Siglo XVI.” In Haciendas Forales y Hacienda Real: homenaje a Miguel Artola y Felipe Ruiz Martín, edited by de Pinedo, Fernández y Fernández, Emiliano, 37–61. Universidad del País Vasco, 1990.Google Scholar
Bonney, Richard. The Rise of the Fiscal State in Europe, c. 1200—1815. Oxford: Oxford University Press, 1999.Google Scholar
Bonney, Richard. European State Finance Database. 1995—2007. http://www.le.ac.uk/hi/bon/ESFDB/ (accessed 23 August 2007).Google Scholar
Braudel, Fernand. The Mediterranean and the Mediterranean World in the Age of Philip II. Second Revised Edition. Glasgow: William Colins & Sons, 1966.Google Scholar
Brewer, John S.The Sinews of Power. Cambridge, MA: Harvard University Press, 1988.Google Scholar
Carande, Ramón. Carlos V y sus banqueros. 3 vols. Barcelona: Crítica, 1987.Google Scholar
Morales, Carlos, Javier de, Carlos. Felipe II: El Imperio en Bancarrota. Madrid: Dilema, 2008.Google Scholar
Carreras, Albert. “Modern Spain.” In The Oxford Encyclopedia of Economic History, edited by Mokyr, J., 546–53. New York: Oxford University Press, 2003.Google Scholar
Zamora, Carretero, Manuel, Juan. Cortes, monarquía, ciudades: Las Cortes de Castilla a comienzos de la época moderna (1476-1515). Madrid: Siglo XXI, 1988.Google Scholar
Conklin, James. “The Theory of Sovereign Debt and Spain Under Philip II.” Journal of Political Economy 106, no. 3 (1998): 483–513.Google Scholar
Crafts, N. F. R.“Exogenous or Endogenous Growth? The Industrial Revolution Reconsidered.” The Journal of Economic History 55, no. 4 (1995): 754–72.CrossRefGoogle Scholar
Dandelet, Thomas James. Roma Hispanica: The Creation of Spanish Rome in the Golden Age. Ph.D. Diss., University of California, Berkeley, 1995.Google Scholar
Dandelet, Thomas James. Spanish Rome, 1500-1700. New Haven, CT: Yale University Press, 2001.CrossRefGoogle Scholar
De Lamar, Jensen. Diplomacy and Dogmatism: Bernardino de Mendoza and the French Catholic League. Cambridge, MA: Harvard University Press, 1964.Google Scholar
De Vries, Jan, and Van der Woude, Ad. The First Modern Economy. Cambridge: Cambridge University Press, 1997.Google Scholar
Drelichman, Mauricio. “The Curse of Montezuma: American Silver and the Dutch Disease.” Explorations in Economic History 42, no. 3 (2005): 349–80.Google Scholar
Drelichman, Mauricio, and Voth, Hans-Joachim. “Debt Sustainability in Historical Perspective: The Role of Fiscal Repression.” Journal of the European Economic Association 6, no. 2—3 (2008): 657–67.CrossRefGoogle Scholar
Drelichman, Mauricio, and Voth, Hans-Joachim. “Institutions and the Resource Curse in Early Modern Spain.” In Institutions and Economic Performance, edited by Helpman, E., 120–47. Cambridge, MA: Harvard University Press, 2008.Google Scholar
Drelichman, Mauricio, and Voth, Hans-Joachim. “Lending to the Borrower from Hell: Debt and Default in the Age of Philip II, 1556—1598.” Working Paper, University of British Columbia, Vancouver, 2010.Google Scholar
Drelichman, Mauricio, and Voth, Hans-Joachim. “Serial Defaults, Serial Profits: Returns to Sovereign Lending in the Age of Philip II.” Working Paper, University of British Columbia, Vancouver, 2010.Google Scholar
Eichengreen, Barry, and Portes, Richard. “Settling Defaults in the Era of Bond Finance.” World Bank Economic Review 3, no. 2 (1989): 211–39.CrossRefGoogle Scholar
Ministerio de Cultura, España.. General de Simancas, Archivo. Sections: “Contadurías Generales 2a Epoca” and “Consejo y Juntas de Hacienda.”Google Scholar
Ferguson, Niall. The Cash Nexus: Money and Power in the Modern World, 1700-2000. New York: Basic Books, 2002.Google Scholar
Perez, Fortea, Ignacio, José. Las Cortes de Castilla y León bajo los Austrias: una interpretación. Junta de Castilla y León, 2009.Google Scholar
Fritschy, W.“A ‘Financial Revolution’ Reconsidered: Public Finance in Holland During the Dutch Revolt, 1568—1648.” Economic History Review 56, no. 1 (2003): 57–89.Google Scholar
Gelabert, Juan. “Castile, 1504—1808.” In The Rise of the Fiscal State in Europe, c. 1200-1815, edited by Bonney, R., 201–42. Oxford: Oxford University Press, 1999.Google Scholar
Grossman, Herschel I. and Van Huyck, John B.. “Sovereign Debt as a Contingent Claim: Excusable Default, Repudiation, and Reputation.” American Economic Review 78, no. 5 (1988): 1088–97.Google Scholar
Hamilton, Earl J.American Treasure and the Price Revolution in Spain, 1501-1650. Cambridge, MA: Harvard University Press, 1934.Google Scholar
Hoffman, Philip T. and Norberg, Kathryn. Fiscal Crises, Liberty, and Representative Government, 1450-1789. Stanford, CA: Stanford University Press, 1994.CrossRefGoogle Scholar
International Monetary Fund. World Economic Outlook. Washington: IMF, 2003.Google Scholar
Jago, Charles. “Habsburg Absolutism and the Cortes of Castile.” The American Historical Review 86, no. 2 (1981): 307–26.CrossRefGoogle Scholar
Jago, Charles. “Philip II and the Cortes of Castile: The Case of the Cortes of 1576.” Past & Present 109 (1985): 22–43.Google Scholar
Kennedy, Paul M.The Rise and Fall of the Great Powers: Economic Change and Military Conflict from 1500 to 2000. New York: Random House, 1987.Google Scholar
Koenigsberger, H. G.The Government of Sicily Under Philip II of Spain: A Study in the Practice of Empire. London: Staples, 1951.Google Scholar
Lapeyre, Henri. Simón Ruiz et les “asientos” de Philippe II. Paris: Librairie Armand Colin, 1953.Google Scholar
Las Cortes de Castilla y León en la Edad Moderna. Valladolid: Cortes de Castilla y León, 1989.Google Scholar
Lovett, A. W.“The Castilian Bankruptcy of 1575.” The Historical Journal 23, no. 4 (1980): 899–911.Google Scholar
Lovett, A. W.“The General Settlement of 1577: An Aspect of Spanish Finance in the Early Modern Period.” The Historical Journal 25, no. 1 (1982): 1–22.Google Scholar
Lynch, J.“Philip II and the Papacy.” Transactions of the Royal Historical Society 11 (1961): 23–42.CrossRefGoogle Scholar
Marcos Martín, Alberto. España en los siglos XVI, XVII, y XVIII. Barcelona: Crítica, 2000.Google Scholar
Mitchell, Brian R.British Historical Statistics. Cambridge: Cambridge University Press, 1988.Google Scholar
Mitchener, Kris J. and Weidenmier, Marc D.. “Supersanctions and Sovereign Debt Repayment.” Journal of International Money and Finance 29, no. 1 (2010): 19–36.Google Scholar
Morineau, Michel. Incroyables gazettes et fabuleux metaux. Cambridge: Cambridge University Press, 1985.Google Scholar
Nadal i Oller, Jordi. La población española: siglos XVI a XX. First corrected and augmented ed. Barcelona: Ariel, 1984.Google Scholar
O'Brien, Patrick K. “Mercantilist Institutions for the Pursuit of Power with Profit: The Management of Britain's National Debt, 1756—1815.” In The Fiscal Military State in Eighteenth-Century Europe, edited by Storrs, C., 167–200. Farnham and Burlington: Ashgate, 1997.Google Scholar
Ormrod, W. M., Bonney, Richard, and Bonney, Margaret. Crises, Revolutions, and Self-Sustained Growth: Essays in European Fiscal History. Stamford: Shaun Tyas, 1999.Google Scholar
Parker, Geoffrey. “Spain, Her Enemies, and the Revolt of the Netherlands, 1559—1648.” Past & Present 49, no. 1 (1970): 71–95.CrossRefGoogle Scholar
Parker, Geoffrey. The Dutch Revolt. New York: Penguin Books, 1977.Google Scholar
Parker, Geoffrey. Spain and the Netherlands, 1559-1659. London: William Collins & Sons, 1979.Google Scholar
Parker, Geoffrey. The Grand Strategy of Philip II. New Haven, CT and London: Yale University Press, 1998.Google Scholar
Parker, Geoffrey. The Army of Flanders and the Spanish Roady, 1567-1659: The Logistics of Spanish Victory and Defeat in the Low Countries’ War. 2nd edition. New York: Cambridge University Press, 2004.Google Scholar
Reinhart, Carmen M., Rogoff, Kenneth S., and Savastano, Miguel A.. “Debt Intolerance.” Brookings Papers on Economic Activity 2003, no. 1 (2003): 1–74.Google Scholar
Ruiz Martín, Felipe. “Un expediente financiero entre 1560 y 1575: La hacienda de Felipe II y la Casa de Contratación de Sevilla.” Moneda y Crédito 92 (1965): 3–58.Google Scholar
Ruiz Martín, Felipe. “Las finanzas españolas durante el reinado de Felipe II.” Cuadernos de Historia, Anexos de la Revista Hispania 2 (1968): 181–203.Google Scholar
Sargent, Thomas J. and Velde, Francois R.. “Macroeconomic Features of the French Revolution.” Journal of Political Economy 103, no. 3 (1995): 474–518.Google Scholar
Sims, Chris. “Comments on ‘Debt Intolerance.’” Brookings Papers on Economic Activity 2003, no. 1 (2003): 63–74.CrossRefGoogle Scholar
Tenace, Edward Shannon. The Spanish Intervention in Brittany and the Failure of Philip II's Bid for European Hegemony, 1589-1598. Ph.D. diss., University of Illinois, 1997.Google Scholar
Tenace, Edward Shannon. “A Strategy of Reaction: The Armadas of 1596 and 1597 and the Spanish Struggle for European Hegemony.” English History Review 118 (2003): 855–82.CrossRefGoogle Scholar
t'Hart, Marjolein. “The United Provinces, 1579—1806.” In The Rise of the Fiscal State in Europe, c. 1200-1815, edited by Bonney, R. J., 309–26. Oxford: Oxford University Press, 1999.Google Scholar
Thompson, I. A. A.War and Government in Habsburg Spain. London: The Athlone Press-University of London, 1976.Google Scholar
Thompson, I. A. A.War and Society in Habsburg Spain: Selected Essays. Brookfield: Ashgate Publishing Company, 1992.Google Scholar
Thompson, I. A. A.Crown and Cortes: Government, Institutions, and Representation in Early Modern Castile. Aldershot: Variorum, 1993.Google Scholar
Thompson, I. A. A. “Castile: Absolutism, Constitutionalism, and Liberty.” In Fiscal Crises, Liberty, and Representative Government, 1450-1789. Stanford, CA: Stanford University Press, 1994.Google Scholar
Thompson, I. A. A. “Castile: Polity, Fiscality, and Fiscal Crisis.” In Fiscal Crises, Liberty, and Representative Government, 1450-1789, edited by Hoffman, P. T. and Norberg, K., 140–80. Stanford, CA: Stanford University Press, 1994.CrossRefGoogle Scholar
Toboso Sánchez, Pilar. La deuda pública castellana durante el Antiguo Régimen (juros) y su liquidación en el siglo XIX. Madrid: Instituto de Estudios Fiscales, 1987.Google Scholar
Tomz, Michael. Reputation and International Cooperation: Sovereign Debt Across Three Centuries. Princeton, NJ: Princeton University Press, 2007.Google Scholar
Torres López, Manuel, and Pérez-Prendes, J.M.. Los Juros (aportación documental para una historia de la deuda pública en España). Fábrica de Moneda y Timbre, 1963.Google Scholar
Tortella, Gabriel, and Comín, Francisco. “Fiscal and Monetary Institutions in Spain (1600—1900).” In Transferring Wealth and Power from the Old World to the New: Monetary and Fiscal Institutions in the Seventeenth Through the Nineteenth Centuries, edited by Bordo, M. D. and Cortés Conde, R., 140–86. Cambridge: Cambridge University Press, 2001.Google Scholar
Ulloa, Modesto. La hacienda real de Castilla en el reinado de Felipe II. 2 ed.Madrid: Fundación Universitaria Española, Seminario Cisneros, 1977.Google Scholar
Velde, Francois R.“John Law's System.” American Economic Review 97, no. 2 (2007): 276–79.Google Scholar
Weir, David R.“Tontines, Public Finance, and Revolution in France and England, 1688—1789.” The Journal of Economic History 49, no. 1 (1989): 95–124.CrossRefGoogle Scholar
White, Eugene. “Was There a Solution to the Financial Crisis of the Ancien Regime?” The Journal of Economic History 49, no. 3 (1989): 545–69.Google Scholar
White, Eugene. “The French Revolution and the Politics of Government Finance, 1770—1815.” The Journal of Economic History 55, no. 2 (1995): 227–55.Google Scholar
White, Eugene. “France and the Failure to Modernize Macroeconomic Institutions.” In Transfering Wealth and Power from the Old to the New World, edited by Bordo, M. and Cortes Conde, R., 59–99. Cambridge: Cambridge University Press, 2001.Google Scholar
Yun Casalilla, Bartolomé. “El Siglo de la Hegemonía Castellana (1450—1590).” In Historia Económica de España, Siglos X-XX, edited by Comín, F., Hernández, M. and Llopis, E., 51–83. Barcelona: Crítica, 2002.Google Scholar
Yun Casalilla, Bartolomé. Marte contra Minerva: El precio del imperio español, c. 1450-1600. Barcelona: Crítica, 2004.Google Scholar