I have always wondered why former Spanish colonies today are underdeveloped compared to advanced nations and I think I finally understand why. Basically, the Encomienda system and the Caste system created structural rigidities which made the Latin Americaneconomies resistant to change.  The colonies exported mainly agricultural and mining products to their masters in Europe. So whenever there were technological developments worldwide with the advent of Industrialization, the colonies did not readily adopt these new developments. Rather than using modern and intensive agriculture, they merely developed unutilized lands given to landlords under the Encomienda system.  Profits were used by the elite for conspicuous consumption rather than for reinvestment and technology as was happening in the US and England. The majority of the people were struggling for survival and did not have the necessary skills required by industrialization. In short, there was a “vicious cycle” of low productivity, low investment and low skills which results in low productivity.  In my mind, this is the major reason virtually ALL former Spanish and Portugese colonies to this day are underdeveloped compared to the more advanced nations of the world.