It has been traditional for students of the Hispanic world in the eighteenth century to identify the introduction of ‘free trade’ between Spain and her American empire as the cornerstone of the Bourbon programme of economic reform. The reasons which they cite are subsumed with admirable clarity by the preamble to the famous Regiamento para el comercio libre of October 12, 1778 itself: the king was convinced, it explained, that ‘only a free and protected Commerce between European and American Spaniards can restore Agriculture, Industry, and Population in my Dominions to their former vigour.

The Eastern Border Region (EBR) of Paraguay (defined as the present-day administrative Departments of Amambay, Canendiyú and Alto Paraná) is one of the few remaining frontier zones suitable for intensive agricultural development in the southern cone of Latin America. Comprising 35 percent (about 5.4 million has.) of the area of eastern Paraguay, its natural resources remained largely unexploited until the mid-1960s, itself a reflection of the very poor growth performance of the Paraguayan economy throughout most of the 20th century in comparison with neighbouring countries.

A late-comer in the privileged corporate structure of New Spain, the army struggled to wrest a position and to gain recognition. Other jurisdictions such as the merchant consulados, the Acordada, the Mining Guild, and the jealous creole-dominated ayuntamientos, contested military pretensions and triggered numerous judicial and jurisdictional disputes over how far the military could extend its legal powers. Representatives of the reformed Bourbon civil administration, unsure in some instances of the limits of their own authority, did not welcome a dynamic and grasping presence. For their own part, the army officers dispatched to command Mexican regular and militia units often represented the aggressively haughty airs of the European Spaniard – attitudes that rasped at the deep-rooted inferiority of the creoles and left them enraged. Little wonder that there was a constant stream of disputes, misunderstandings, and challenges directed against the army and the fucro militar.1

At the end of its first year, the revolutionary process in Nicaragua must be considered a success from several different perspectives. The war-torn economy has been stabilized, a progressive agrarian reform program initiated, a large state sector formed on the basis of expropriated Somocista property, an independent foreign policy adopted, and a massive literacy campaign launched throughout the country. Most important, however, has been the imposition of a high degree of political stability coupled with, and partially growing out of, the consolidation of power in the hands of a cohesive revolutionary vanguard. The ability of the Sandinista Front of National Liberation (FSLN) to establish its hegemony in post-Somoza Nicaragua has permitted the government to move decisively on a number of critical fronts and to escape power-sharing formulas that could have turned the policymaking process into a protracted struggle against entrenched interests. The foundation of Sandinista control over the government is simple: as Comandante Humberto Ortega explained, ‘We took power by arms, and it should be clear who has power in Nicaragua today.’