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Asunción

Why Nations Fail: The Origins of Power, Prosperity, and Poverty

Asunción, founded by Spanish colonists in 1537 as Nuestra Señora de Santa María de la Asunción, became the capital of Paraguay and the destination toward which the first Spanish settlement in the region was redirected. Its founding illustrates the colonial priority described in the book: rather than cultivating land themselves, the Spaniards sought populations whose labor and resources they could control.

From Buenos Aires to the Paraná

The settlement arose from the failure of the Spanish foothold at Buenos Aires. The local Charrúas and Querandí refused to provide food or work for the newcomers and attacked the settlement; the Spanish also found no local silver or gold to exploit. While trying to survive, they sent expeditions in search of richer territory and populations more readily coerced. In 1537, an expedition led by Juan de Ayolas traveled up the Paraná River, looking for a route to the Inca lands, and encountered the Guaraní.

Conquest and colonial order

The Guaraní were a sedentary agricultural people whose economy depended on maize and cassava. After a brief conflict, the Spanish overcame their resistance and established Asunción. The conquistadors married Guaraní princesses and installed themselves as a new aristocracy, taking the top position in existing systems of forced labor and tribute rather than creating a colony based on Spanish settlers’ own agricultural work. The settlement thus offered the labor arrangements and social order the colonists had sought at Buenos Aires.

Abandonment and significance

Within four years of Asunción’s founding, Buenos Aires was abandoned as the Spanish settlers moved to the new town. Buenos Aires was not resettled until 1580. The contrast between the two settlements makes Asunción significant in the book’s account of Spanish colonization: the decisive factor was not simply a hospitable climate or a promising location, but whether local people could be made to supply labor and whether the colony could organize extraction through existing institutions. Asunción endured as Paraguay’s capital, while the failed settlement at Buenos Aires remained empty for decades.