This chapter surveys the economic growth experience of Iberia since the early nineteenth century. After more than a century dominated by sluggish growth and divergence from Western Europe, there was a substantial acceleration in GDP and per capita GDP growth of both Iberian economies c. 1950. As a result, in the very long term, Iberia has partially closed its initial gap with the Western European core. The chapter also shows that, in the case of Spain, the early 1950s represent a divide between a hundred years of moderate growth dominated by factor accumulation, and half a century of fast growth led by total factor productivity (TFP). By contrast, this intensive model of growth was not shared by Portugal, where per capita GDP increases so far have been mainly associated to factor accumulation, rather than to TFP increases. Finally, new estimates of regional historical GDPs show that regional inequality emerged after the first long wave of modern economic growth and market integration. By 1950, the geographical patterns of regional inequality were well established, and since then they have just been consolidated. As a result, a poor Iberia has emerged that spreads over a continuous area around the border between Spain and Portugal.

This chapter describes the key changes in terms of money, credit and banking in the 1000 to 1500 period within the various kingdoms. It highlights how after a period of late monetization, each Christian kingdom transitioned to centralized models that were well-articulated with their European counterparts while keeping important distinctive traits. Nevertheless, the demand for means of payment on behalf of kings, merchants and other agents stimulated the development of credit. The need for credit spanned the entire Peninsula and the urban/rural divide. Thus, all countries saw the emergence of lively credit markets for (mostly private) borrowers, buttressed by functioning courts and regulations. These markets involved both specialists and non-specialists, but it was only in the Crown of Aragon where financial agents transitioned to institutionalized banks.

This chapter examines the main stages of economic growth and structural change in the Portuguese and Spanish economies and explains the main differences between them and the core European countries. Besides presenting these stages, the chapter also measures the contribution of structural change to economic growth in the long term. Then, the chapter disaggregates further within the three sectors to determine the leading industries at each stage of economic transformation. Finally, the contribution of these sectors to economic growth is studied. Both Iberian countries were latecomers in industrialization and also in agricultural success. With a late start in the mid-nineteenth century in relation to the core European countries, due to both poor factor endowments and institutions, they advanced in terms of structural change during the interwar period and experienced post-1950 growth miracles. Major changes took place when technological change and foreign markets were adapted to their factor endowments. The main differences were the slow path of Portugal in relation to Spain, structural change was less important, with agriculture having a lower (higher) and services a higher (lower) share of GDP and employment during the nineteenth century with the opposite being the case in the twentieth century respectively.

This chapter analyses the reasons behind changes in the intensity with which inventions and other changes in production took place in early modern Iberian polities. Rather than quantifying the impact of science on the economy and determine the direction of causality – two processes that were interconnected – this chapter studies the developments in science, knowledge and technology in relation to what is known about the economic performance of the Iberian economy. It analyses first the improvements in the agrarian sector, before showing some technological advances in the non-agrarian part of the economy. The chapter describes especially the innovations in specific areas of manufacturing like shipbuilding, textiles (woollens, silk and cotton) and mining. The last section discusses the role played by the institutional framework, and it explains how the Iberian monarchies promoted technology and knowledge in different ways.

This chapter presents the evolution of the main demographic variables: population growth and its sources, occupational structure, territorial distribution, and educational levels. Each of these four variables are taken separately to provide a long-run, quantitative description and an analysis based on bibliography. The overall image resulting from overlaps and interactions between the variables suggests three distinct “structural periods”. The first period, which covers most of the nineteenth century, featured remarkably stable structures. In contrast, the second period, from around 1890 to 1980, was an era of major transformations, such as the demographic transition, de-agrarianization, urbanization and mass literacy. After 1980 a third period is found in which demographic change has shifted to a different path involving low population growth, tertiarization, new trends in population geography, and longer schooling periods. The new challenges associated with this last period call for active public policies.

This chapter analyses foreign trade and trade routes in the Iberian Peninsula between the eleventh and the fifteenth centuries. It overviews the dual circumstances of the Christian kingdoms and of the Muslim al-Andalus over the long term, although it focuses especially on the period between the thirteenth and the fifteenth centuries, and on events taking place in Castile, Aragon and Portugal. The study tries to answer questions like how were the Iberian trade ties forged, how did the Iberian economies integrate with the Mediterranean and north-European markets, and what role did Iberian and foreign traders play in the commercial gamble. For this purpose, the Iberian trade is examined from three different angles. First, from the routes and the goods traded among the Iberian kingdoms as well as outside Iberia. Second, from the role of agents and institutions. This will involve an analysis of the distinction between local and foreign traders, as well as the influence of institutional frameworks on foreign trade. Finally, the chapter clarifies the reasons why Iberia achieved a leading position in European trade during the later middle ages, and why it spearheaded foreign trade at the dawn of the sixteenth century and the so-called “First Global Age”.

By the year 1000 the Andalusian caliphate constituted a highly urbanized society, where the largest cities in Europe were located, while the economy of the Christian kingdoms of Iberia was characterized by a low level of urbanization and a poor market development. Five hundred years later, the territory of al-Andalus had disappeared and its economy had been absorbed and transformed into the Christian kingdoms. The latter’s territorial expansion was marked by the growth of cities, the impact of trade on the agrarian economy and an increase in rural stratification that, at different levels, made the market important for the satisfaction of needs and peasant consumption. In the Christian kingdoms, a strong increase in noble spending, emulated by urban elites, dedicated to the conspicuous consumption of products partially purchased on the international market, occurred throughout the period. After the Black Death, with the consolidation of a rural elite, important sectors of the population were attracted by the lifestyle of the urban elites. This evolution can also be detectable in the lifestyle of vast sectors of the population, in the cities as well as in the rural areas.

During the nineteenth century, Iberia entered the path towards modern economic growth. Although industrialization occurred later than in other Western European countries, economic progress ultimately led to an unprecedented improvement in the standards of living. This chapter aims to analyse the evolution of such advances and, when possible, compare Iberia with its Western European counterparts. In so doing, it presents several indicators capturing different dimensions of well-being, average income, consumption patterns, height, life expectancy, and a synthetic measure, the Human Development Index (HDI). Income distribution is examined by looking at alternative inequality indicators: Gini coefficient, the extraction ratio and top income shares. Based on this information the long-run evolution of economic inequality is assessed. All in all, the evidence presented shows that economic progress and well-being significantly improved in Iberia since mid-nineteenth century, although this happened at a slower pace than in Western Europe.

This chapter aims to tie together many of the themes in the preceding chapters with a four-fold strategy. First, it sets out a general overview of the Iberian economy during the medieval period. This includes an analysis of how and why the economic balance of power shifted from the Islamic to the Christian states during the medieval centuries. Then, it provides a broader picture of some major developments in the peri-Iberian European and Islamic-Mediterranean economies in the medieval period, including micro- and macroeconomic developments. Third, this chapter shows how different regions of Iberia connected with elements of the peri-Iberian economies set out in the previous section; specifically how the Islamic states maintained ties with North Africa and points further afield; how the Christian North and West connected with the northern Atlantic economy; how the south-west eventually built ties with the Atlantic islands, West Africa, and more distant markets; and how the Eastern peninsula maintained ties with various Mediterranean markets. Finally, the chapter ends with some general conclusions, including the idea that, as this volume amply shows, it is high time to dispel any lingering sense of an economic “Black Legend” when discussing the economy of medieval Iberia.

The long evolution that had been transforming the Iberian economy since the fifth century found its excipient in the Islamic invasion at the beginning of the eighth century. A consequence was the division of the peninsula into two parts separated by a territorial strip as a border. In the south side, the Muslim al-Andalus settled new population, generally repeating its tribal and traditional structure; applied changes in the tenure and exploitation of agricultural systems; and consolidated the preeminence of urban centres. On this basis it was established a monetary economy connected to the political and social evolution of Mediterranean Islam, applying economic policies that involved public expenditure, taxation and market regulation. Meanwhile, in the northern side, the Christian kingdoms and counties were strengthened thanks to the increase of agrarian land, including the absorption of the border strip. From the eleventh century onwards, feudal structures favoured the kingdoms and counties expansion over the Muslim south. Urban capitals articulated the new territories, at the same time that the Camino de Santiago attracted European immigration which promoted urban activities. Commercial development linked to centres beyond the Pyrenees and, through the Mediterranean, to urban centres of Provence and Italy.

To say that good institutions are a fundamental condition to foster economic growth is close to platitude. However, it is important to explain how it happens, and therefore the main aim of this chapter is to present and discuss the role played by both private and public institutions in decision making processes related to the implementation of economic policies encouraging economic growth. By discussing the lessons from the Iberian experience throughout the nineteenth and twentieth centuries, the chapter tries to disclose the similarities and differences between both countries, with a main focus on the way how the institutional environment helps to explain the circumstances that favour or hinder economic performance. This comparative approach begins with the age of the liberal revolutions in the early years of the nineteenth century and closes with the processes of democracy building and European integration in the two last decades of the twentieth century. The study of institutional changes and continuities in Spain and Portugal during this long period offers multiple opportunities to better understand the articulation between the economic and business environment, the dynamics of the markets and the economic policies designed or implemented by the state, in fulfilment of its regulatory role.

We can consider, quite rightly, that this book, while being the collective work of more than 70 authors, is overall the posthumous work of Pedro Lains, who sadly passed away on 16 May 2021. Pedro always expressed concern about southern Europe not being sufficiently represented in the analyses of the continent’s economic past. Therefore, he believed that the countries of the Iberian Peninsula shared sufficient common features so as to deserve a monograph, published in English, to address their trajectory and facilitate their integration in European economic history.

His efforts with this book were titanic. He designed the structure of a text that had to span from the Early Middle Ages to the present day. The perspective that he sought was not to analyse the Iberian territories separately but to integrate them in a common vision.