Economic modernisation in Latin America 1 Economic modernisation in Latin America and the Caribbean between 1890 and 1925: A view from the energy consumption 1 by César Yáñez, Universidad de Barcelona M.d.Mar Rubio, Universitat Pompeu Fabra * Albert Carreras, Universitat Pompeu Fabra By the last decade of the 19th century, Latin America and the Caribbean had overcome some of the most important barriers to economic modernisation (Skidmore & Smith, 1996). The institutional distress which gave birth to weak governments (and states) started to ease. Disruptive contests between military ‘caudillos’ had given way to more stable governments (although no very much more representative). The series of wars over contested control of territory and natural resources (US-Mexico 1847-1848; the Triple Alliance War 1865-1870; the Pacific War 1871-1881, to mention just some) ended; so that a new set of established borders were secured. In addition, the reforms of the 1860s and 1870s paved the way towards economic modernisation: steps were taken for the formation of land markets; in Cuba and Brazil free workers replaced the slaves in the 1880s; flows of European workers to Argentina and Uruguay continue to increase. Furthermore, the limitations posed by the low quality and scarcity of land communication began to be resolved by development of railways. Cause and effect of economic modernisation, by 1890, railways were working almost in every country of Latin America. Just few of the smaller and underdeveloped Central American economies delayed the development of railways to the first decades of the 20th-century (Sanz Fernández, 1998). Last but not least, the barriers to foreign direct investment (FDI) progressively lessen, as demonstrated by the development of railways; Great Britain allowed banking branches abroad in 1870; overall, the liberal governments of the Latin America willingly accepted the entrance of foreign capital providing technological transfers and know-how to the region. * Corresponding author: mar.rubio@upf.edu 1 This article is part of the research project Importaciones y modernización económica en América Latina, 1890- 1960, funded by the Spanish Ministerio de Ciencia y Tecnología (BEC2003-00190). We are grateful to our research team colleagues Xavier Tafunell and Mauricio Folchi. We acknowledge careful and dedicated research assistance provided by Marc Badia, José Jofré, Frank Notten and Carolina Roman.