The Institutional Factors Of The Economical Gaps Between The Southern And Northern American During The Colonial Period

As we know, the USA and Canada are the most developed capitalist countries while Latin American countries are less developed capitalist countries. The developed of economy in Latin American has long been subject to North America. In fact, North and South America’s economic development not only displays in a big gap, but also in the early colonial period this gap was obviously. Looking back on 15 16century,when Columbus discovered the new world, north and south America’s natural environment and humanistic environment with little difference. In economic terms, both started at the same time approximately. Why is that’s such a large gap in the development process with the two parts? I think the main reason is the institutional factors.During the colonial period, the developmental differences of the metropolitan states provided the groundwork for their different ways of development. Spain is a country with the feudal system while England has begun to capitalism. In the early years of the Western foreign colonization, although British colonization lagged behind Spain, on the surface, the two countries were mercantilism as their banner. But on the internal domestic, they had essential differences. Spain became a Catholic stronghold and reinforced their authoritarian rule continually. But Britain began to pursue the state religion and advanced towards the direction of the Constitutional government step by step. Thus, these reasons promoted the two countries that decided the different mechanisms of colonialism. In America, in order to obtain precious metals, Spain took the feudal strategy of monopoly, beginning with mining and also involving in trade and other industries. In the process of capital circulation, the purpose is consumption but not production. The results are due to resources in short supply, which make precious metals flowing into other Western European countries. This was a kind of sinking and traditional feudal system of mercantilism that leaved little basis for economic development of the colony. We combined the colony tribalism and will found that the backwardness was inevitable. North America embarks on the road of the liberal capitalism, beginning from agriculture, via the stage of capitalist mercantilism. The emerging bourgeoisie in North America do not have so many constraints as in South America. In North America the institutional system is more active, the production and flow of capital are in a virtuous cycle, and the additional value of capital is effective implemented. The first 13 North American colonies are divided into northern, central and southern regions with distinct economic development characteristics and mutual economic complementary. The British control over North America is much more relaxed than its control over South America; there are no such precious metals in North America as in South, and there is also no such India system.Therefore, North America is a brand new immigration country with European features. Hence, the development of environment of the North American was greatly superior to South America. This is the differences in the economic development of North and South America.