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Paper short abstract:

This paper aims to consider to what extent success and failure in managing colonial monopolistic contracts in 17th century Portugal was tied to (ill)informed decision-making and poor/adequate assessment of risk.

Paper long abstract:

In seventeenth century Portugal, the adjudication of colonial monopolistic contracts (contratos) was extensively used by the Monarchy to tax and regulate long distance trade, as well as to finance the empire's administrative apparatus across continents. For businessman, the contracting of these monopolies placed them in a favorable position to dominate key sectors of overseas commerce and to lobby for the Monarch's favor. However, these enterprises were not devoid of risks. The shadow of bankruptcy, followed by the expropriation of mortgaged assets and prosecution, not only of the contract-holder(s), but also of a series of warrantors who backed them up, loomed at large.

This paper's goal is to assess if the decision to bid for a certain contrato was guided by proficient knowledge of the different variables that conditioned the overseas trades they were to engage with. Did contractors and their networks possessed a clear understanding of the consumption demands of different markets and its institutions? Were they capable of correctly assessing the evolution of demand and supply? Could they anticipate factors lying "outside" the market, such as armed conflict? Did they fully grasp the logistic and financial means that these burdensome enterprises required? Ultimately, I seek to understand, to what extent success or failure might have been tied to (ill)informed decision-making and poor/adequate assessment of risk.

To answer these questions I will look at the trajectories of several individuals who held contratos in different businesses and areas of the empire, and their strategies to finance and operationalize them.