An Economic Analysis of Spanish Inquisition's Motivations and Consequences

An Economic Analysis of Spanish Inquisition’s Motivations

                                   and Consequences

                                       Jordi Vidal-Robert∗

                                   This draft: October 2011

                                             Abstract
          The motivations behind the Spanish Inquisition (1478-1834) have long intrigued his-
      torians. This paper explores the role of the Spanish Inquisition as a repressive tool of
      the Spanish Crown and provides evidence of the long-term effects of this institution. In
      particular, I explore the relationship between inquisitorial activity and war from both
      a theoretical and an empirical point of view. Governmentâs demand for social con-
      trol/repression was greater in periods of war, because war increased the likelihood of
      internal revolts. To minimize the threat of rebellion, the Inquisition conducted more
      trials when Spanish war activity was intense. However, once the benefits of the activ-
      ity needed to satisfy the demand for social control exceeded its costs, the Inquisition
      dropped its repression level. This behavior describes an inverse-U relationship between
      inquisitorial and war intensity. To test the predictions of this framework, I assemble
      time series data for seven Spanish inquisitorial districts on annual trials of the Inqui-
      sition as well as wars conducted by the Spanish Crown. I show that there exists an
      inverse-U relationship between wars and inquisitorial activity. My results are robust
      to the inclusion of data on the severity of the weather (droughts) in the regression as
      well as adjustments for spillover effects from other districts than the main district un-
      der analysis. I also construct a database of 35,000 trials of the Inquisition to study
      if the Inquisition also persecuted citizens for other reasons. My results show that re-
      ligious persecution was especially significant at early stages of inquisitorial existence,
      while repressive motivations explain better the behavior of this institution later on.
      With respect to the consequences of the Spanish Inquisition, I construct a dataset for
      five regions and fourteen provinces on inquisitorial activity, population, economic and
      political outcomes, I show that regions that were more affected by the Inquisition are
      associated with a lower economic development than regions less affected by it.

∗
    Department of Economics, Boston University. Email: jordivr@bu.edu. http://people.bu.edu/jordivr

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1        Introduction

The rise and development of the nation-state in the early modern period is one of the most
important historical examples of the interrelation between institutions and economics. The
literature has emphasized the role of European politics and the so-called military revolution
as possible causes of this emergence.1 The introduction of new war technology (e.g. the
cannon) in the middle of the fifteenth century not only changed war strategies, but also
caused an increase of war expenses. On the one hand, states had to acquire new and costly
technology and, on the other hand, they had to improve defense infrastructures. Hence, an
increase of fiscal revenues was necessary to finance war. The centralization of power and
authority and the growing importance of public finances and public debt were, therefore,
some of the consequences of the need to finance interstate wars in Europe.
        War-making was not the only action that State organized violence could execute. States
coud also use this monopoly of violence to extract wealth from their subjects and to repress
their local enemies.2 . Hence, different states would organize their violence activities in dif-
ferent ways, depending on their goals: wars, extraction or elimination of local enemies. In
other words, nation-states did not emerge and develop in the same way, inducing different
economic patterns. The works of North (1991) and North and Thomas (1973) emphasize
how states that ensured property rights promoted economic growth, while states that gener-
ated an inefficient set of property rights harmed economic development. The literature has
traditionally classified England and Holland in the former group, while it classifies Spain in
    1
     In this paper I consider the definition of the development of the nation-state given by Bean (1973). He
describes it as the “consolidation of politcal and military power that occurred in Europe in the early modern
period". Bean (1973), Brewer (1990) and Tilly (1985), for example, examine the relation between war and
the political power.
   2
     Tilly (1985) refers to the latter as “elimination of local enemies" and also emphasizes the role of protec-
tion, which he defines as the “elimination of the enemies of their clients". For example, the elimination of
commercial competitors of local bourgeoisie

                                                       2

the latter group.
    However, recent works by Blaydes and Chaney (2011) and Grafe (2012) emphasize the
proximity between early modern Spain’s institutional framework and the English one.3 Thus,
the Spanish institutional framework characteristics, development and economic interaction
remains unclear.4 In this paper, I examine the interrelation between war making and re-
pression in early modern Spain by studying the role of one institution that was created
and developed during the process of emergence of the Spanish nation-state: the Spanish
Inquisition.
    The modern Spanish Inquisition started officially in 1478 with a papal bull of Sixtus
IV, which established the Holy Office5 and ceded control to the Spanish Crown. From
that moment on until her definitive abolition in 1834, the Spanish Inquisition conducted
more than 100,000 trials of Jews, Muslims, Lutherans and other assorted “heresies”. Its
importance for Spanish history relies, partially, in two features. First, it lasted for more than
three-hundred years, being created at the beginning of the Spanish Empire and abolished
with the entrance of Napoleon in Spain in 1808.6 Second, it was the first institution that
had uniform de facto power on all the Spanish territory. For this reason, its General Council
became the second most important political institution in the early modern Spain.7 Given
the latter characteristic, I argue that the Spanish Crown used this institution to repress any
political ideology that differ from the official one in order to prevent internal revolts.
    In this paper, I study this hypothesis from both a theoretical and empirical point of
   3
     For instance, they emphasize the role of the Cortes, the Spanish Parliament, as being much more relevant
than the role traditionally assigned by the literature.
   4
     However, Drelichman’s works on la mesta and the American silver and Grafe’s works study part of the
Spanish institutional framework at that time.
   5
     Both names Holy Office and Spanish Inquisition were used to refer to this institution.
   6
     Note that the official date of its abolition was 1834. However, from 1808 to 1834 it was abolished and
reinstated several times, without having any influence on the Spanish political and economic development.
   7
     The General Council ruled and controlled all inquisitorial activity. The first institution of importance
was the General Council of Castile, which ruled and controlled the Crown of Castile.

                                                     3

view by exploring the relationship between Spanish war activity and inquisitorial activity.
Government’s demand for repression was greater in periods of war, because war increased the
likelihood of internal revolts. To minimize the threat of rebellion, the Inquisition conducted
more trials when Spanish war activity was intense. However, once the benefits of the activity
needed to satisfy the demand for repression exceeded its costs, the Inquisition dropped its
repression level. This behavior describes an inverse-U relationship between inquisitorial and
war intensity. To test the predictions of this framework, I assemble time series data for seven
Spanish inquisitorial districts on annual trials of the Inquisition as well as wars conducted
by the Spanish Crown. I show that there exists an inverse-U relationship between wars and
inquisitorial activity. My results are robust to the inclusion of data on the severity of the
weather (droughts) in the regression as well as adjustments for spillover effects from other
districts than the main district under analysis.
       Repression is not the only motive argued to cause inquisitorial activity. Historians have
focused their investigations to explain two other motivations behind inquisitorial activity:
Extracting wealth through confiscations and religious persecution.8 These three different
hypothesis do not need to be exclusive and they can coexist to explain the behavior of the
Inquisition. In order to explore this option, I use the database described before and I assem-
ble a database of 35,000 trials of the Inquisition. I show evidence that religious persecution
was especially significant at early stages of inquisitorial existence, while repressive motiva-
tions explain better the behavior of this institution later on. My data do not suggest that
the Inquisition was an extractive institution.
       The importance of explaining the motivations behind inquisitorial activity relies on the
capability to shed light on the mechanisms through which a repressive institution affects
   8
    Llorente (1822) proposed that the main objective of the Inquisition was the extraction of wealth of those
who were accused. And ? proposes that the main and only motivation of the Inquisition was the religious
persecution, mainly against Jews.

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long run economic performance. In this paper, I assemble time series data for five regions
(fourteen provinces) both at a regional and municipality level on activities of the Inquisition,
population, economic and political outcomes to give empirical evidence that Spanish regions
that suffered a more severe inquisitorial activity have worse current economic and political
outcomes. Moreover, I provide a possible channel that links severe inquisitorial activity to
present outcomes: the entrepreneurial behavior and technology innovation of the different
districts of the Inquisition. The repressive behavior could have affected the willingness to
innovate or to invest in new technology to avoid being punished by the Inquisition. This
lack of investment in new technology and entrepreneurship, thus, could have lead to lower
economic outcomes.

2        Motivations behind Inquisitorial Activity

The Black legend of the Spanish Inquisition states that it was an irrational institution,
whose main activity was to eradicate (in the strictest sense) any activity or behavior that
was suspicious of heresy. However, if we look carefully at the data we will observe two
things. First, that the Spanish Inquisition was not different, in rate of executions, from other
European tribunals. Second, that trials against Islamism, Judaism or Luternaism did not
add up to 50% of the total activity of the Inquisition. Table 1 shows that the relative number
of executions of the Spanish Inquisition did not differ from other European countries. The
main difference comes from the absolute number of trials and the persistence of its activity,
much higher and longer in the Spanish case. Table 2 shows that the proportion of religious
trials9 was lower than the proportion of non-religious trials. This fact is satisfied at the
national level and for all districts, with the exception of Valencia, which had the highest
concentration of moriscos in Spain. The data, thus, suggests that inquisitorial activity
    9
        I label religious trials those carried out against Islamism, Luteranism and Judaism.

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cannot be explained by purely religious motives. Historians have extensively debated the
actual reasons behind inquisitorial activity. This debate has been mainly focused on three
different motivations: income maximization, religious persecution and social control.
    Llorente, a nineteenth century Inquisition historian, proposed that the Inquisition was
essentially an income maximizing institution. He argued that its main objective was the
extraction of wealth from accused people through confiscations and penalties.10 Millan
(1984) and Kamen (1965) offered different opinions of this hypothesis. On the one hand,
Millan argued that the amount of confiscations and penalties represented a small percentage
of the total wealth obtained by the Inquisition and, thus, he rejected Llorente’s hypothesis.
On the other hand, Kamen emphasized the role of confiscations through their indirect effect
on the finances of the institution. His argument is that confiscations allowed the Inquisition
either to buy juros or to obtain censos, which would ensure a significant amount of income.
    Net (1995) proposes that the main and only motivation of the Inquisition was the religious
persecution, mainly against Jews. This persecution and the creation of the institution would
be due to the popular pressure to eradicate heresy.
    The third motivation describes the Inquisition as a repressive tool of the Spanish Crown.
It would have been created to repress any ideology that would differ from the official one
in order to prevent a hypothetical successful revolt or political conflict. There is anecdotic
  10
     There are also popular stories across Spain that would support Llorente’s hypothesis. ? tells the following
popular story. Sometime in the late 16th century María Soliña married Pedro Barba, a fisherman and one
of the wealthiest men of Cangas, a village in Galicia, Spain. Barba owned real estate, a boat, and a share of
the donations collected by the churches Colexiata de Cangas and Iglesia de San Cibrán. In 1617, the Turks
sacked the village of Cangas. Thirty-three people died, almost two hundred houses were burned and most
of the fishermen’s boats and gear were destroyed. According to the story, Maria lost her husband and her
son in the attack; subsequently, she inherited all her husbandâs possessions. In the aftermath of the conflict
the local nobility of Cangas, along with the village’s richest men joined with the Inquisition to denounce
“witches"– typically women with significant wealth. If convicted (or confessed) the Inquisition would seize
the “witch’s" wealth, some of which would also accrue to the local nobility. The nobles and others accused
Maria of being a witch, arguing as a proof that she used to go for a walk on the beach every night in order
to commune with her husband and son; she was tortured until she confessed and her possessions were seized.
The story ends with Maria dying poor and alone.

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evidence that inquisitorial activity depended on the Crownâs needs. For example, ? explains
how the Crown asked inquisitorial intervention to repress political disturbances in Valencia
in 1620’s and ? describes how inquisitorial repression depended on imperial and commercial
interests of the Crown.
   As far as I know, there are no previous works on the Spanish Inquisition in the economics
literature. However, there are some articles that study persecution. In particular, ? and
? study how witchcrafts episodes are related to adverse weather shocks. ? finds evidence
that negative economic shocks (high levels of precipitations) increase the number of witch-
killings in Tanzania. He argues that “witches" are usually unproductive old women and their
family cannot afford to sustain them during economic downturns. ? finds evidence of a
causal relationship between weather conditions and witchcraft in the sixteenth, seventeenth,
and eighteenth centuries Europe. She uses weather data of the little ace age period to
explain witch trials. When an anomalous decrease in temperatures occurred, there was an
increase of witch trials. While Oster deals with what seems a popular reaction and pressure
against some citizens because of weather and economic downturns, this paper deals with a
complete organized Institution. The Spanish Inquisition had a whole network of informers
and representatives that covered all territory and it did not necessarily need a popular
reaction in order to accuse somebody. Nevertheless, both organizations might have had in
common that they could react to exogenous variables as weather conditions.
   Figures 1 to 4 show the number of trials and the intensity (trials per thousands of
people) of witchcrafts and Inquisition trials in European territories and Spanish inquisitorial
districts. We observe that not only the total number of trials is higher in the Spanish
inquisitorial districts, but also the intensity and persistence of the Spanish Inquisition is
higher than the European witchcrafts episodes. This suggests that the Inquisition was more
active and more persistent across time than European witchcrafts episodes and, thus, it is

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more likely that it caused a deeper and longer impact on the society. The only comparable
activity, by its intensity and activity, is the one we observe in the Inquisition of Venice and
Geneva. Although they can surpass Spanish activity and intensity in particular years, the
Spanish Inquisition lasted longer and in a more persistent way than the Inquisition observed
in these Italian regions.

3     Institutional Background
3.1       Organization

The modern Spanish Inquisition started officially in 1478 with a papal bull of Sixtus IV,
which established the Holy Office and ceded control to the Spanish Crown. From that mo-
ment on until her definitive abolition in 1834 the Spanish Inquisition conducted more than
100,000 trials of Jews, Muslims, Lutherans and other assorted “heresies". The Inquisition
was a centralized institution, which had the same de facto power in all the Spanish terri-
tory.11    The General Inquisitor and the Supreme Council of the Inquisition (La Suprema)
coordinated and controlled the finances of all districts, as well as their monthly activity and
their procedures.
    The Inquisition divided Spain in twenty districts. In order to control all districts, the
Holy Office created two subdivisions: Castile and Aragon , which comprised ten districts
each. Figure 5, shows the inquisitorial districts in the Peninsula Iberica. Grey disticts
belonged to the subdivision of Aragon and white districts belonged to the subdivision of
Castile. This geographical distribution is very similar to the political distribution that
existed in Spain at that time.12
   11
      It was the first institution that had uniform de facto power on all the Spanish territory. For this reason,
its General Council became the second most important political institution in the early modern Spain.The
General Council ruled and controlled all inquisitorial activity. The first institution of importance in Spain
was the General Council of Castile, which ruled and controlled the Crown of Castile.
   12
      The two most important and extense Spanish kingdoms of the Peninsula, Castile and Aragon, merged

                                                       8

The organization of the Inquisition emphasize the idea of a centralized institution that
controlled all the extension of the kingdom, but, at the same time, it gives an idea that
regional and local differences may have had an impact on the activity.                  13   This local vs.
national trade off will be exposed later in the paper when I confront religious and repressive
motives of the inquisitorial activity.
    The activity of the Inquisition could vary across time too. Historians have identified
five periods of the inquisitorial activity, taking into account the intensity and patterns of
the behavior of the Inquisition. Those periods are: 1478-1519, 1520-1569, 1570-1621, 1621-
1700 and 1700-1808. I will consider this in my empirical analysis to control for specific
characteristics of those periods.

3.2    Inquisitorial finances

The two main periods of the Inquisition finances are:

   1. 1480-1560

          • The Royal treasury was in charge of the Inquisitionâs finances, that is, the trea-
            sury paid all Inquisition expenses (wages, ordinary and extraordinary expenses)
            and was in charge of collecting confiscations, fines and penalties.

   2. 1560-1834

          • The Inquisition had its own treasury, completely independent of the royal trea-
            sury. District tribunals administered their own income and expenses under the
            supervision of the Suprema.
in 1469 with the marriage of the Catholic Kings.
  13
     For example, the La Suprema could control the level of activity, but the regional districts would differ
in the relative number of trials of each type of heresy.

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While in the first phase the sources of income were just confiscations and fines, in the
second stage the Inquisition treasury incorporated censos and canonries as sources of income.
Confiscations were monetary punishments imposed to any prisoner convicted of heresy; Fines
and penalties were payments in order to avoid “life sentence" or monetary punishments for
prisoners that were not proven guilty; Canonries was the income collected from the canonries
under Inquisitorial control; censos were forced loans with high interest rates. Moreover, the
Inquisition acquired Juros (Crownâs bonds) directly purchasing them from the king, from
confiscations or from royal concessions.
       The financial burden of maintaining inquisitorial activity has been argued by MIllan as
one of the possible causes of this change in financial control. This burden would be relative to
the costs of the Spanish war activity. I explore this idea in the description of the theoretical
framework in the next section.
       The primary expenses of the Inquisition were the salaries of the inquisitorial personnel,
ordinary expenses (expenses from the ordinary activity of the tribunals) and extraordinary
expenses (construction and repairs costs, cost of feeding prisoners and the cost of Autos de
fe).

4       Theoretical Framework

The theoretical framework presented in this section rationalizes why an absolute monarchy,
like the Spanish Crown, might adopt an institution like the Inquisition for the purposes
of repression: to impose its political ideology and to stamp out revolt. In particular, it
exposes the mechanism that links wars and inquisitorial activity. In particular, Government’s
“demandâ for repression (inquisitorial activity) was greater during periods of war. Citizens
were more likely to revolt when the Crown was at war, because war diverted the Crownâs
attention away from domestic affairs. To minimize the threat of internal rebellion, the

                                                10

Inquisition should conduct more trials when Spain was at war than when it was at peace.
However, if the costs of supplying goverment’s demand for repression were too high, the
Inquisition dropped its activity.
       The game has three stages and three players (King, Citizens and Inquisition), who will
decide on the inquisitorial financial control and the repression level (King and Inquisition)
and the decision of insurrection (Citizens).
       The King faces the costs of war (c(wars), wherec(.) > 0) and the costs of the repres-
sive activity of the Inquisition (d) when he controls inquisitorial finances. If he decides to
decentralize the finances he will face sunk costs E; those represent the costs of losing the
absolute control over the Inquisition. When the King can prevent an insurrection, he will
have a benefit θ.
       The Inquisition would have the same benefit, θ, if it can prevent an insurrection. More-
over, inquisitorial activity reported some benefits to the institution, some could be monetary
benefits, but in general would be political and social benefits. These benefits from the trials
are represented by f (e), where f (.) > 0 > f (.). However, this trial activity generates costs
e.14 This specification captures the more diverse financial mechanisms that the Inquisition
had once the King decentralized its finances.15
       Citizens decide if they revolt(i) at the same time that the King chooses the level of
repression. Citizens will have disutility from inquisitorial activity (R(d) if the King exerts
it or R(e) if the Inquisition exerts it, R (.) > 0). If the citizens revolt (i) they will obtain
some utility from the fact that the King is distracted by external wars. The idea is that
Citizens are more likely to generate a successful insurrection when the King is engaged in
more external wars and he is not able to provide enough internal control. In other words, the
  14
     Political participation on the Council of Castile would be one political benefit. Wages were the most
important part of the costs of the Inquisition.
  15
     Those were explained in the previous section.

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greater the distraction of the king, the smaller the collective action problem of organizing a
successful revolt. This utility is represented by g(wars), where g  (wars) > 0.
   Therefore the timing of the game proceeds as follows: (i) Realization of wars; (ii) the King
decides whether to control the inquisitorial finances as a part of the Royal Treasury (cen-
tralize) or to decentralize inquisitorial finances. In the latter case, the Inquisition controls
its finances; (iii) the repression level and the insurrection decision are decided simultane-
ously. If the King controls the inquisitorial finances, the King and the citizens will choose
simultaneously the repression level and the decision of insurrection, respectively. Otherwise,
that is when the finances are decentralized, the Inquisition will decide the level of repression
instead of the King.
   Figure 6 represents the extensive form of the game and shows the payoffs in the following
order: King, Inquisition and Citizens.
   Solving the game by backward induction, I find that inquisitorial activity is increasing
with wars until a certain threshold is reached. When the level of war activity is too high,
the Inquisition cannot supply government’s demand for repression because it is too costly.
Therefore, once this threshold is surpassed inquisitorial activity will drop. The datails on
this result and other implications are explained in the rest of the section.
   If the King controls the finances of the Inquisition, he will always prefer not to allow
for an insurrection, given the benefits of internal peace and control. Therefore, he would
always like to exert a level of repression that satisfies g(wars) = R(d). Citizens will revolt
if g(wars) > R(d). These expressions imply that the King would like to exert a repression
level that is increasing with wars. However, there exists a level of wars w such that if
wars > w, then θ − c(wars) − d < 0. That is, given the wars fought abroad, the sum of
its costs and the costs of repression will surpass the benefits of internal peace and control.
When this happens, the repression costs will be too high to be sustained and the King will

                                              12

prefer to externalize the inquisitorial finances. That happens because the repression costs,
will be greater than the costs of externalization (d > E) at this point. Therefore, when the
King has an absolute control over the Inquisition, we will observe that inquisitorial activity
will increase with wars. Once, the costs of this repression are too costly for the King we will
see the decentralization of the inquisitorial finances.
   Under decentralization, the Inquisition will always prefer not to allow for an internal
revolt, given the benefits of internal peace and control and the political and economic benefits
of its activity. Therefore, it would always like to exert a level of repression that satisfies
g(wars) = R(e). Citizens will insurrect if g(wars) > R(e). These expressions imply that
the Inquisition would like to exert a repression level that is increasing with wars. However,
there exists a level of wars w̄ such that if wars>w̄, then θ + f (e) − e < 0. That implies
that the repression effort that the Inquisition should carry on is too costly and, therefore, it
would prefer not to exert it. This decision will entail a shar decrease of inquisitorial activity
and an insurrection.
   Hence, when the inquisitorial finances are decentralized, we will observe that inquisitorial
activity is increasing with wars until a certain threshold is reached. Once this point is
surpassed we will perceive a sharp decrease of its activity. Once this happens the likelihood
of an internal revolt is very high. Note also that w̄>w, given the conditions that determine
both values.
   There are three clear implications of the framework: (i) the King will decide to decen-
tralize inquisitorial finances if the number of wars is not very low or very high; (ii) there
exists an inverse-U relationship between inquisitorial intensity and wars; (iii) the likelihood
and intensity of an internal revolt will increase once inquisitorial effort drops.
   Figure ?? shows inquisitorial intensity (line) and the number of wars in which Spain was
fighting (bars). We can identify the predictions of the framework in this graph. We observe

                                               13

that the number of wars was neither very high nor very low when the Inquisition took
control of its own finances. This fact corresponds to the first prediction of the framework.
Moreover, once the finances were externalized, they were not internalized again in the period
under consideration (until 1808 when Napoleon abolished the Inquisition). Thus, the second
prediction is also observed in the data. The same analysis can be made with Figure 8, which
shows the size of the army fighting wars instead of number of wars.
    Figure 9 shows predictions (ii) and (iii) of the framework. The solid line represent the
fitted values of the relation between army size (on the x axis) and inquisitorial activity (on
the left y axis). We observe how the inverted U shape of this relationship (prediction (ii)) of
the framework. The dashed line represent the fitted values of the relationship between army
size and an internal revolt index (on the right y axis). We observe how revolts increase once
inquisitorial activity drops and the army size is large enough.
    To observe anecdotic evidence of the theoretical predictions, we should focus on the
Revolt of the Catalans episode in 1640. Just before 1640, we observe how inquisitorial
intensity is increasing with the number of wars (or their intensity), but when this number
reaches its maximum, inquisitorial effort drops. That happened around 1640, the year that
the Revolt of the Catalans started.

5    Data

To evaluate empirically the three predictions of the theoretical framework, I bring together
time series data of seven Spanish inquisitorial districts on inquisitorial activity, as well as
information on the wars the Spanish crown was fighting. Moreover, in order to control for
adverse weather and economic shocks, I obtained data on severity of the weather, described
by an index of rainfall anomalies, wages and prices. Below I describe in detail the sources
of information for each of this data.

                                              14

5.1      Inquisition Data

Inquisitorial districts sent periodical activity reports to La Suprema. In particular, peninsu-
lar districts sent monthly reports, while American and Italian districts sent annually reports.
In this way, La Suprema controlled the activity, procedures and finances of all districts.
Therefore, there were two copies of each Inquisitorial district activity report: one was in
the see of each Inquisitorial district and the second was in Madrid, where La Suprema met
every weekday. Some of the archives of the sees are still available, like Barcelona Archives,
which are hold in the Arxiu de la Corona Catalano-Aragonesa in Barcelona. However, most
of them are no longer available because they were lost, burned or destroyed. Fortunately,
most of La Suprema archives did not get lost and they can be consulted in the Inquisition
section of the Archivo Historico Nacional in Madrid.
       Historians have studied these archives and published books, articles and catalogues about
Inquisitorial activity of several districts. The first catalogue of Inquisitorial activity (district
of Toledo) was published in 1903 and written by Vicente Vignau. In 1982, Perez Ramirez
published the Catalogue of Cuenca, after completing an earlier version of Cirac Estopañan.
Some years later, Blazquez Miguel published the catalogues of Murcia and Barcelona in
1987 and 1990 respectively. Contreras (1982) and Carcel (1980) and Carcel (1976) contain
the list of trials of Galicia and Valencia respectively. I use these published trial records to
assemble time series data with the number of trials and inquisitorial intensity (trials per ten
thousand of inhabitants) per year and for seven of the eight districts I have information so
far.
       Moreover, I also build a dataset containing individual data of 35,000 trials from the
following five districts: Barcelona, Valencia, Murcia, Cuenca and Toledo. These published
trial records, which contain data of the name of the accused (and therefore her gender), the
location where she lived, the year of the trial, the charges and the final sentence. In some

                                                15

cases, there is information about the defendantâs occupation and nationality too.

5.2   Population Data

Spanish population is obtained from several sources: Census of 1591 (contained in Menendez
Pidal, 1990), Censo de Floridablanca, Nadal (1974), Contreras, Cerrillo Cruz, Garcia Carcel
and Salomon (1964). Missing year data is calculated by linear extrapolation of actual data.

5.3   Weather Data

I use annual indexes of rainfall anomalies as a proxy for weather data in Inquisition districts.
Rainfall anomalies index is calculated from an indirect source of information. That is, there is
no actual measurement of rainfall in the fifteenth, sixteenth or seventeenth century. However,
Barriendos and Martin-Vide (1998) and Barriendos and Rodrigo (2008) construct an index
from ecclesiastical rogations that asked for some rain. He describes five different levels of
rogations depending on the activities of each of them. Level five means a severe drought
period and level one is just a very mild drought. He multiplies every rogation episode by its
level and adds the ones that correspond to the same year in order to obtain a yearly rough
index of rainfall anomalies.

5.4   War Data

I use data on wars in which Spain was involved from 1490 to 1820 from Levy (1983) and
Kiser, Drass, and Brustein (1995). In particular, I use the number of wars in which Spain
was involved in a given year. Moreover, I will use data on army size obtained in Sorokin
(1937). The author describes the number of men that were fighting in several wars for Spain.
I will use this measure as a proxy for intensity of the wars.

                                              16

5.5   Village Information

In order to classify the villages where trials happened, I use the Catastro de Ensenada (1749).
This survey about village characteristics in 18th century Castile, has a specific question
asking the type of village. Villages could be classified as Realengas, if they belonged to
the King; de Señorío, if they belonged to a Lord; or Eclesiásticas or Abadengas, if they
belonged to the Church. This survey only covers Castilian territory. In order to obtain the
classification for Catalonia I used Bautista-Golobardas (1831) and Frigola (1824). In order
to obtain Valencia’s classification, I used Miñona and Bedoya (1826) and Madoz (1848).
Finally, I went through city hall’s websites if villages could not be classified first with these
sources.

6     Empirical Analysis

In this section I test the second prediction of the framework. The hypothesis is that there
exists an inverse-U relationship between inquisitorial and war activity. Table 3 shows the
mean intensity of inquisitorial activity in each district by number of wars. We can observe
how, inquisitorial intensity increases when the number of wars increases, but this intensity is
decreasing when the number of wars is high enough. This suggests this quadratic relationship
predicted by the framework.

6.1   Empirical strategy

I assemble first a panel data of seven districts of the Spanish Inquisition from 1478 to 1808.
The equation of interest is the following one:

                                              17

intensityit =β0 + β1 f (t) + β2 warst + β3 wars2t + β4 droughtsit +

                           + β5 spilloverit−1 + β6 Djt + μi + it

                                                                                             (1)

where intensityit is the number of trials per ten thousand inhabitants in district i at time
t. warst is the numbers of wars or the size of the army that was fighting in them at time t,
droughtsit represents the severity of the weather in district i at time t. μi are the district
fixed effects, and Djt are dummy variables for years close to the expulsion of the Moriscos,
the expulsion of the Jews or for years after the French Revolution. I also control for a cubic
time trend (f (t)).
   I use number of wars and total army size fighting wars abroad as a determinant of
repression (inquisitorial activity). I will test prediction 3 of the theoretical framework: in-
quisitorial activity is increasing with the number of wars (or their intensity, represented by
army size) up to a certain threshold. Once this threshold has been surpassed, inquisitorial
activity drops, since the effort of repressive activity is too costly for the Inquisition. Combin-
ing these predictions we should find an inverse-U shaped relationship between number (or
intensity) of wars and inquisitorial intensity. That relationship would reflect the repressive
mechanism described in this paper.
   Our coefficients of interest are, therefore, β2 and β3 . I expect a positive sign for β2 and a
negative sign for β3 and we should expect to find that both coefficients are jointly significant
different from 0.
   In order to see if the results of the panel data are driven by some of the districts, I also
conduct time series analysis for each of the districts. The specification for that case is the
following one:

                                               18

intensityt =β0 + β1 f (t) + β2 warst + β3 wars2t + β4 droughtst +

                            + β5 spillovert−1 + β6 Djt + t

                                                                                           (2)

where the variables are the same as in equation 1. The only difference is that I run this
specification for each of the districts.

6.2   Results

Table 4 show the results for Panel Data Analysis of the effects of army size on the Spanish
Inquisition activity. We can observe how the inverse-U relationship between army size and
inquisitorial intensity is significant across all specifications. These robust results confirm
predictions three and four of the theoretical framework. Thus, the inverse-U relationship
seems robust to the inclusion of adverse weather shocks, spillover effects, and Jewish and
Moriscos expulsion dummies. This result also holds if we include Inquisitors Fixed Effects
(columns 6 and 7) or if, instead of the cubic time trend, we include inquisitorial periods fixed
effects. These two alternative specifications want to capture possible different inquisitorial
behaviors depending on the General Inquisitor or the historical period of the Inquisition.
   I repeat the analysis collapsing all the information by decades. In table 5 I have the
result of the panel analysis where each observation refers to a district at decade t (instead
of year t). The results support the quadratic relationship between inquisitorial activity and
war activity.
   These results support the hypothesis of social control tool explained before. When more
resources are diverged from internal control, the likelihood of an internal revolt increases
and, thus, the Inquisition would increase its intensity to prevent it. However, when too

                                               19

many resources are diverged, not even a high level of inquisitorial intensity would stop a
revolt and, thus, the Inquisition drops its intensity.
   In order to study if there is any inquisitorial district that is driving this effect, I repeat
the analysis using time series for each district. Table 6 shows the results of these time
series regressions. Barcelona, Granada and Valencia seem to drive the results I found in
my Panel Data Analysis and the Spanish time series analysis (first column). This result is
not surprising, since these regions were the ones that carried out most of the revolts against
the Spanish Crown during the period under analysis. Moreover, the Kings were especially
worried about these regions because they were historically more belligerent to them than
the rest of the regions. Granada was the source of Muslim discontent and Barcelona was
the source of the Catalan discontent (two of the most important revolts were carried out in
order to obtain Catalan independence in 1640 and 1714).
   To summarize, we observe a significant quadratic relation between number of wars and
intensity of the Inquisition. In particular, the marginal increase of the Spanish Inquisition
intensity is higher when the number of wars is not too high. However, when wars reach a
certain threshold inquisitorial intensity decreases. This would correspond to the predictions
of the theoretical framework, emphasizing the role of the Inquisition as a repressive tool of
the Spanish Crown.

6.3   Instrumental Variables Approach

Despite the results support the hypothesis of repression, some doubts may rise when think-
ing about a potential double causality problem. A possible reverse story would explain
how inquisitorial intensity increased in order to prevent social revolts and foreign conflicts
would also rise as a way to unify the country to fight against one common enemy and avoid
internal differences. Another potential story would describe that having the Spanish Inqui-

                                              20

sition would have allowed the Spanish Crown to fight more wars. In any case, the raise in
inquisitorial activity would cause an increase in foreign wars.
      To adress this issue, I provide Instrumental Variables estimates of the panel data and
time series regressions. I use extraordinary revenues of the Spanish Crown as an instrument
for the size of the army that is fighting wars in Europe. Those extraordinary revenues are
the American silver and extraordinary servicio de millones, which were revenues obtained
from the Spanish Parliament (Cortes). Both millones and the American silver increased the
Spanish Crownâs income revenues and contributed to the payment of the cost of foreign
wars. .With respect to the extraordinary revenues obtained from the Cortes, those were
attained after a negotiating process between the cities represented in the Parliament and
the King. The amount was collected through an income tax. Therefore it is unlikely that
any of those variables caused an increase in inquisitorial activity. That is, these variables
only affected inquisitorial activity through war activity.
      Table 7 shows the results of the second stage of the Instrumental Variable approach.
The signs of the coefficients are as expected. However, the estimations have a lot of noise
and, therefore, the standard errors are too big to show any significance of the coefficients.16

6.4      Religious Persecution or Repression?

Tables 9 and 10 show the number of trials and relative activity of the Inquisition sorted
by “heresies" and districts. These tables cover the whole period under analysis, 1478-1808,
as well as each of the periods identified by historians. Panels F show how Lutheranism,
Islamism and Judaism trials altogether represent a little bit less than 50% of the total trials
carried on by the Inquisition. Given the information of these tables, we cannot classify
inquisitorial activity motivations by being purely religious. In fact, the relevance of these
 16
      Table 8 shows the results of the first stage.

                                                     21

religious “heresies" is particularly significant during the first years of the Inquisition and on
particular districts as Valencia and Murcia. Moreover, we can observe how different districts
seem to have one common objective, Judaism, and a more particular objective. For example,
Barcelona had more trials on Lutheranism and Granada and Valencia on Islamism. One
explanation for differences across districts can be the distance to the rest of Europe (for a
higher activity on Lutheranism), as well as the initial population of each of the “heresies".
For example, Valencia had one of the highest concentrations of Moriscos and, thus, it could
induce to a higher number of inquisitorial trials on Islamism.
   Therefore, these tables suggest that inquisitorial activity may have had different moti-
vations across time and across districts as well. To analyze if social control was one of these
motivations, I will use the whole dataset of 35,000 individual trials and its classification.
To observe if the trials on some âheresiesâ or group of âheresiesâ responded to an increase
in foreign war intensity, I regress the dummy variable of a particular heresy on army size,
district fixed effects and a time trend. Since OLS estimates may only show correlations I
will use the same Instrumental Variable for army size as I used in section 7.
   If social control is one of the motivations of inquisitorial activity, we should observe that
trials of religious“heresiesâ (Islamism, Judaism and Lutheranism) would decrease with an
increase in wars (or their intensity). On the other hand, we should observe how not religious
charges increase with wars (or their intensity). The reason is that charges that are not
purely religious would respond to the demand for social control given the distraction caused
by foreign wars, while religious charges would respond more to religious motives.
   Table 11 shows the results for the following dependent variables: Religious (takes value
1 if the charge is either Judaism, Lutheranism or Islamism), Lord (1 if the village belonged
to a Lord) or Crown (1 if the village belonged to the Spanish Crown). Results suggest that
religious trials decreased with an increase of army size, especially in Valencia and Barcelona,

                                              22

the latter being the omitted district. Those are the same districts for which I found more
evidence of social control in Table 6.
   There is also evidence that trials in villages that belonged to a Lord and the Church,
had a higher probability of having a trial with an increase of the army size. On the contrary,
army size had a negative impact on the probabilities of being subjected to a trial in villages
that belonged to the Crown. This would suggest a higher demand of social control for
those regions over which the King had less control. These results could be explained by the
fact that the King would like to control those type of villages that revolted against him in
the beginning of the 16th century in the conflict of the Comunidades in Castile and in the
conflict of Germanias in Valencia.

6.5   Trials and Finances of the Inquisition: an Extractive Institution?

The relationship between wars, finances and inquisitorial activity may still raise another
reasonable doubt: inquisitorial intensity increase could be due to a higher need of the Spanish
Crown to finance its wars. If that were the case, we would observe a positive correlation
between inquisitorial activity and inquisitorial revenues, since the revenues could finance
foreign wars.
   Tables 12 and 13 show the correlations between army size, trials and inquisitorial finances
variables. We observe how neither the army size nor the trials are related to an increase of
the inquisitorial revenues. In fact, it seems the relation goes in the opposite direction. The
more trials and intensity of the war the less revenues are obtained by the Inquisition.
   These simple correlations suggest two things. First, the Inquisition did not increase its
activity in order to obtain an increase of its revenues. Therefore, inquisitorial trials do not
seem to be income motivated, as Llorente proposed. Second, army size did not increase
inquisitorial revenues. Thus, it does not seem that the Inquisition increased its revenues in

                                              23

order to pay for the wars that the Spanish Crown was fighting. This excludes a possible
argument that could suggest that the Inquisition increased its activity in order to finance
Spanish wars. In fact, what we can observe is the opposite was happening. When the
intensity of wars increased the Inquisition experienced a decrease in its revenues.
    These results suggest that the Inquisition was not motivated by the extraction of wealth
from the citizens, either to increase its own income or to pay the Spanish Crown’s wars.
Actually, they emphasize the role of the Inquisition as a social control tool of the government.

7    Long term effects

Since the works of Engerman and Sokoloff (1997), Acemoglu, Johnson, and Robinson (2001)
and Acemoglu, Johnson, and Robinson (2002) , the recent literature that studies how his-
torical episodes or institutions have persistent effects on current economic outcomes have
focused on two directions. First, to show the impact of these episodes in economic develop-
ment. Engerman and Sokoloff (1997), Acemoglu, Johnson, and Robinson (2001), Acemoglu,
Johnson, and Robinson (2002) and Nunn (2008) are just a few examples. Second, to show
the channels of such persistence. For example, Nunn and Wantchekon (forthcoming) show
how the level of trust on institutions was on of the channels through which historic African
slave trade had an impact on long-run economic prosperity. In a different setting, Dell
(2010) shows how the institution of la mita in Peru affected economic development through
investment in public goods.
    Historians have often defined the persistence of the inquisitorial mind as the influence
of inquisitorial ideas and mentality to current society’s behavior. This paper addresses
this question and its objective is twofold: first, to show the existence and magnitude of
this persistence on economic outcomes, and second to study the channels through which
inquisitorial activity hindered economic development.

                                              24

This section tests empirical if Spanish regions or municipalities that suffered a more
severe inquisitorial activity have worse current economic and political outcomes. Moreover,
I provide a possible channel that links severe inquisitorial activity to present outcomes: the
entrepreneurial behavior and technology innovation of the different districts of the Inquisi-
tion. The repressive behavior could have affected the willingness to innovate or to invest
in new technology to avoid being punished by the Inquisition. This lack of investment in
new technology and entrepreneurship, thus, could have lead to lower economic outcomes.
In fact, regions that were more affected by such repression seem to adopt new technology
during the Industrial Revolution later than those regions less affected by it.

7.1   Urbanization

To test these hypotheses I assemble time series data for five regions (fourteen provinces) both
at a regional and municipality level on activities of the Inquisition, population, economic and
political outcomes. Figures 10 and 11 presents the level of inquisitorial activity at a regional
and province level, respectively. The goal is to associate these different inquisitorial activity
levels with different economic patterns of development. The basic econometric specifications
proceed as follows:

            urbi,t = β0 + β1 inquisitioni + β2 urbi,0 + β3 geographyi + f (time)

                                                                                            (3)

   urbi,t indicates urbanization growth or level in region iat time t and inquisitioni rep-
resents number of trials or inquisitorial intensity (defined as trials per square kilometers or
trials per year) in region i. geographyi includes geographic variables such as latitude, lon-
gitude, area, altitude and rugeddness (to be included) at a regional level. f (time) includes

                                              25

either a linear time trend or time dummy variables for the different years data is available.
I also control with interaction terms between time dummies and initial urbanization rate.
    β1 is the coefficient of interest. I would expect that regions that were more affected
by the Inquisition, they would have had lower urbanization rates or urbanization growth
afterwards.
    Tables 14 and 15 show the estimates at a regional and province level when time fixed
effects are included. We can observe a negative association between inquisitorial level and
urbanization growth at a regional level in 14.17 The third and last columns show that this
negative relation is important before the 20th century. For example, urbanization growth
in 1694 was 7% lower in a region where 1,000 trials occurred before 1694 .
    In the same way 15 shows a negative association between trial activity and urbanization
levels at a province level. We observe in columns 2 and 4 that this effect is specially significant
when we include non-religious trials as the inquisitorial activity variable. In particular we
observe that 1,000 trials are associated with a 3,5% lower urbanization level.

7.2     Channels of Persistence: Trust and Adoption of New Technology

To study possible channels of the persistence of the inquisitorial mind, I regress a similar
specification as equation 3, including the number of patents of each region in a a given year
as the dependent variable. Moreover, I obtained the answers of the World Values Survey
questions about trust on institutions and attitudes towards scientific advances. Table 17
shows the results of regressing the answers to these questions on inquisitorial level of the
region of the respondent. I control for education and economic levels of the respondent.
    The results in tables 16 and 17 show a strong negative association between inquisito-
rial activity and new technology or attitudes towards new technology, suggesting that the
  17
     The joint test on the variables that include inquisitorial activity reject that they are jointly not significant
different from 0.

                                                        26

Spanish Inquisition had a long and negative influence on innovation. With respect to the
results on trust levels. We observe that it only appears a significant association between
inquisitorial activity and trust levels on institutions. The sign obtained is the opposite of
the one suggested by the literature. Higher trial activity is assciated with more trust on
institutions.

8    Conclusions

This paper reexamines the literature of the motivations of the Inquisition activity. In par-
ticular, it focuses its analysis on the social control hypothesis. Using a new dataset of the
activity of the Spanish Inquisition, I show empirical evidence of an inverse-U relationship
between wars and inquisitorial activity, which corresponds to the predictions of my frame-
work. This result supports that the Inquisition was a repressive tool of the Spanish Crown.
Moreover, I also find that religious persecution was one the primary motivations of this in-
stitution during its early stages of existence. The importance of explaining the motivations
behind inquisitorial activity relies on the capability to shed light on the mechanisms through
which a repressive institution affects long run economic performance. If the Inquisition had
a negative impact in the long run, it is important to discern what kind of institution it
was to explain how it affected economic development. In this paper I show that inquisito-
rial activity is associated with lower levels of urbanization in the long run. To understand
the channles through which the Inquisition could have had a persistent impact on economic
development, it is important to know what kind of institution it was. I show a negative asso-
ciation between inquisitorial activity and attitudes towards new technologies. These results
suggest that the effect of the Inquisition on economic performance would have been through
entrepreneurship incentives and lack of new technology adoption given the motivations of
its activity. The possible effect of the Inquisition on Spanish long run economic performance

                                             27

does not mean that other institutions or shocks did not play an important role on it. For
example, Drelichman (2005) suggested that American silver inflow and an increasing rent
seeking society also affected long run development.

                                           28

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