Colonial Institutions and Cross-Cultural Trade:RepartimientoCredit and Indigenous Production of Cochineal in Eighteenth-Century Oaxaca, Mexico

Colonial societies exhibit peculiar institutions frequently attributed to the unequal and exploitative nature of the relations between colonizer and colonized.Repartimientohas been depicted as a coercive system of production and consumption designed by Spaniards to draw reluctant Amerindians into the market. An examination ofrepartimientothrough the lens of New Institutional Economics provides an alternative understanding of this credit system. Characteristics of therepartimientomost often identified as exploitative are better explained as institutional adaptations designed to facilitate contract enforcement and economize on transaction costs in this cross-cultural trade. Consequently, this peculiar colonial institution served to expand trade.