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Spain: Character and Development of the Economy
Country Study > Chapter 3 > The Economy > Character and Development of the Economy

CHARACTER AND DEVELOPMENT OF THE ECONOMY


Economic historians generally agree that during the nineteenth century and well into the twentieth, at a time when Western Europe was engaged in its great economic transformation, Spain "missed the train of the industrial revolution." Much of the chronic social and political turmoil that took place in Spain during this period can in large measure be attributed to the great difficulties the country encountered in striving for economic modernization. Throughout this period, Spanish social and economic development lagged far behind the levels attained by the industrializing countries of Western Europe. Spain's economic "take-off" began belatedly during the 1950s and reached its height during the 1960s and the early 1970s. A second cycle of economic expansion began in the mid-1980s, and if this one continues, it might catapult Spain into the company of Western Europe's more advanced industrial societies.

At the beginning of the twentieth century, Spain was still mostly rural; modern industry existed only in the textile mills of Catalonia (Spanish, Cataluna; Catalan, Catalunya) and in the metallurgical plants of the Basque provinces was still privately owned, and its public functions were restricted to currency issuance and the provision of funds for state activities. The state largely limited itself to such traditional activities as defense and the maintenance of order and justice. Road building, education, and a few welfare activities were the only public services that had any appreciable impact on the economy.

Considerable economic progress was made during World War I and in the 1920s, particularly during the regime of Miguel Primo de Rivera (1923-30). The Primo de Rivera government initiated important public works projects, including construction of new highways, irrigation facilities, and modernization of the railroad system. It also made a start on reforestation programs. Industry and mining were growing, and there was an average annual increase in the industrial and mining index of 6.4 percent between 1922 and 1931. An income tax, however ineffectively collected, was introduced in 1926, and a number of new banks were started with state backing, to invest in projects considered to have national interest. Certain economic functions were turned over to private monopolistic operations -- of which the most important was the petroleum distribution company, Compania Arrendataria del Monopolio de Petroleos (CAMPSA); others, such as transportation, were put under state control.

These steps toward a modern economic structure were slowed drastically by the political turmoil of the period, which culminated in the Spanish Civil War, and they were further exacerbated by the worldwide depression of the early 1930s. When the Civil War broke out in 1936, it eliminated what little chance Spain might have had to recover from the economic malaise of the period.

Data as of December 1988




Last Updated: December 1988


Editor's Note: Country Studies included here were published between 1988 and 1998. The Country study for Spain was first published in 1988. Where available, the data has been updated through 2008. The date at the bottom of each section will indicate the time period of the data. Information on some countries may no longer be up to date. See the "Research Completed" date at the beginning of each study on the Title Page or the "Data as of" date at the end of each section of text. This information is included due to its comprehensiveness and for historical purposes.

Note that current information from the CIA World Factbook, U.S. Department of State Background Notes, Australia's Department of Foreign Affairs and Trade Country Briefs, the UK's Foreign and Commonwealth Office's Country Profiles, and the World Bank can be found on Factba.se.

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