Mismanagement amid resource abundance: Sovereign risk, private sector credit rationing, and economic stagnation in Colombia, 1861‒98

Abstract

This article examines the relationship between national politics, sovereign default, credit rationing, and their effects on fiscal revenues and exports in nineteenth-century Colombia. Using quantitative and qualitative analysis, it challenges existing narratives on Colombia's lack of sustained nineteenth-century export-led development, showing that sovereign default was a political choice with long-term negative impacts. The study highlights how credit rationing and technological backwardness hindered economic growth. It argues that these policies caused Colombia's economic stagnation, leading to boom-and-bust cycles in export crop production. It identifies substantial growth during the liberal era and minimal growth during the regeneración period.