Bourbon Reforms and State Capacity in the Spanish Empire.

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We study state modernization and its fiscal and political consequences in Spain's American empire during the 18th century. We focus on the intendancy system, whereby the Bourbon rulers introduced a new corps of provincial governors to address misgovernance by local colonial officers. Our empirical strategy leverages the staggered implementation of this reform across the empire, extending from present-day Mexico to Argentina. Using fine-grained administrative data from the royal treasuries, we show that the intendancy system led to a sizable increase in Crown revenue, driven by a strengthening of state presence in the periphery and the disruption of local elite capture. The reform also caused a reduction in the incidence of rebellions by indigenous people, who were harshly exploited under the status quo. However, the intendancy system heightened tensions with the local Creole elites, as reflected by naming patterns, plausibly contributing to the nascent independence movement.