Recent research shows that colonialism reversed levels of devel- opment in much of the non-European world. To explain this re- versal, analysts focus on conditions within the colonized areas. By contrast, drawing on evidence from Spanish and British colonialism, the authors show that the economic models of the colonizing nations also affected the reversals of fortune. Mercantilist Spain tended to colonize most extensively precolonial regions that were populous and highly developed; in turn, extensive Spanish colonization had negative consequences for postcolonial development. In comparison, liberal Britain tended to colonize most extensively precolonial regions that were sparsely populated and underdeveloped; in turn, extensive British colonialism had comparatively positive effects. Thus, both Spain and Britain reversed the fortunes of precolonial regions, but in largely opposite ways.
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