This paper shows that a historical process that ended more than five centuries ago, the
Reconquest, is very important to explain Spanish regional economic development down to
the present day. An indicator measuring the rate of Reconquest reveals a heavily negative
effect on current income differences across the Spanish provinces. A main intervening
factor in the impact the Reconquest has had is the concentration of economic and political
power in a few hands, excluding large segments of the population from access to economic
opportunities when Spain entered the industrialization phase. The timing of the effect is
consistent with this argument. A general implication of our analysis is that large frontier
expansions may favor a political equilibrium among the colonizing agents that is biased
toward the elite, creating the conditions for an inegalitarian society, with negative
consequences for long-term economic developmenT