The Political Economy of the Manila Trade

The fragmented nature of the market and the different bargaining position of the participants in the Pacific exchange was similarly reflected in the political economypolitical economy of the Hispanic Monarchy. The level of territorial fragmentation enabled different interest groups to lobby for commercial legislation with the imperial legal centre, personified by the king. This crystallised the mercantile relationships across the Monarchy into a system in which each territory remained connected through trade, yet was capable of defending their own vested interests from the penetration of other merchants, resulting in a coordination failurecoordination failure that prevented market integrationmarket integration yet guaranteed a balance in imperial commerce until the slow demise of the system in the last quarter of the eighteenth century.