The Journal of Economic History


American Military Interests and Economic Confidence in Spain under the Franco Dictatorship

Oscar Calvo-Gonzalez a1
a1 Principal Economist, European Central Bank, Kaiserstrasse 29, Frankfurt am Main 60311, Germany. E-mail:


The security of property rights is fragile under dictatorships. This is particularly so if economic agents are uncertain as to whether the regime will last. As a result, private investment is withheld and economic performance is poor. Spain was in such a situation after World War II. However, as the Cold War intensified the United States became interested in Spain as a military ally, thereby helping to consolidate Franco's regime. This led to an increase in economic confidence and helps to explain why economic growth resumed in Spain ahead of significant changes in its autarkic economic policies.