The Political Economy of Paraguay and the Impoverishment of the Missions
Located at the extreme periphery of the Spanish Empire, Paraguay suffered from its political role as a buffer state against the rival Portuguese colony of Brazil and the hostile Indian nations. Accordingly, during the late colonial period, extended tours of military duty contributed to the province's severe labor shortage. But of even greater consequence were the combined effects of Paraguay's monocrop economy and its economic dependency within the Imperial commercial capitalist system. Best described as a chain-like structure officially beginning in Spain and extending to the remote province via Panama, Lima, and Buenos Aires, this system served to depress Paraguay's economy and appropriate a great portion of its wealth, leaving the majority of the people in dire poverty.