The efficiency of the mesta: A parable

Abstract

The Mesta, the Spanish guild of shepherds and sheepowners, has been considered to be an inefficient institution because it helped reverse the trend toward enclosures and gained privileges that allowed it to pay minimal rents for pasturelands. Here, on the other hand, it is argued that because of the conflict between pastoral and agricultural interests and the absence of reliable fences, the decrees of the Spanish monarchs helped, rather than hindered, the allocation of economic resources. To reach this conclusion one has to understand the role that the kings played as zoning authorities allocating resources to the highest valued use. Once allocative zoning procedures were in place, land rents were redundant for allocative purposes and hence could be taxed away without altering efficiency.