Question

How did colonialism affect Latin America’s future development outcomes? Describe some of the main products extracted during the colonial period and some of the institutions affecting the factors of production. Discuss two institutions and how they affected future inequality and growth patterns in the region or a country of your choice.

Answer 1

Latin America was largely affected by the Spanish conquest and colonialism. Due to this colonization, the Latin America’s development suffers. This conquest only focuses on the trading practices between different countries and ensures the marketing chains between such countries. But this colonialism ignores the culture differences and tradition stability which leads to instability in the economy.  

Colonialism refers to managing and maintaining of colonies by leaders of another country. The government and economics of the colonies are changed by another territory which hindered the growth of the economy of colonies. The main reasons of colonialism are first to get the economic benefits; expand the power, military advantages etc.

• Political factors – the major impact of colonialism is faced by political segment of the territory. The poor development of the economy causes a great stress among the people. The money and fund which has to be used for the welfare of people are used for maintaining the trading relations. Therefore, in latin America, political sector was undeveloped during the time of colonialism.

• Social and cultural aspects – also, colonialism has affected the social and cultural aspects negatively. The territorial cultural sectors are avoided due to the colonialism and this cause lack of social development.

• Financial sectors – the colonialism refers to controlling weak territory by another territory. This means that the latin america’s financial sectors were also controlled which was a negative for the development of the economy. As there is instability and inability to pay back the debts taken the government which overburdens the financial sector. This stopped the flow of resources which previously was available before the crisis. But after the crisis, the financial institutes were overload by burden of paying off debts. This also causes money supply loss in the economy.