How Well Were Creditors’ Rights Protected in Early Modern Spain? The Case of the Public Mortgage Registry in Malaga

Abstract

New Institutional Economics treats early modern Spain as an example of a state whose political and contracting institutions hindered economic growth. However, the assumption that Spanish political institutions were predatory in this respect has been called into question. This paper challenges the idea that Spain was unable to develop sufficiently good contracting institutions, of which we know relatively little. Using data from Malaga's notarial credit market, I show that legal institutions facilitated contractual compliance in private financial transactions. Specifically, public mortgage registries, which had improved the registration of properties used as collateral since their creation in 1768, favoured the subscription of larger contracts. Furthermore, results suggest that registries could have contributed to the development of a more impersonal credit market.

The imperceptible financial (r)evolution of the censo

“…In the case of the Spanish monarchy, the system became even more secure with the introduction of lien registries, officially in 1539 and 1713, but effectively in 1768. Thanks to those offices, lenders could figure out the solvency of potential borrowers and the possibilities of recovering the capital in case of non-payment by checking how mortgaged a piece of real estate was (Pereira Iglesias, 1996;Peña Mir, 2020).…”

Technology Versus Trust: Non-Bank Credit Systems from Notarized Loans in Early Modern Europe to Cryptolending

“…For German territories seeClemens and Reupke, 2009, p. 16-22. For Spain seeCarvajal, 2018;Peña-Mir, 2020. For seventeenth-century Brazil, seeWasserman, 2014.…”