Spain was a weak state, and that still matters

Robin Grier (with Jerry F. Hough) puts it thus:

The great weakness of the Spanish government was not its bureaucratic nature, but its inability to build an effective bureaucracy until the 1700s. Without an effective bureaucracy, Spain was doomed to a personalistic policy process in which options and tradeoffs often were not properly weighed. Rulers could not trust the market because they were incapable of taxing decentralized economic activity.

One example of the lack of bureaucratic capability during the 1500s and 1600s is found in the example of Philip’s attempt to conquer England with the Spanish Armada. Until the 1580s Philip’s “defense department” had only one secretary assisted by a handful of clerks, none with military experience.

As he prepared to launch the Spanish Armada to try to conquer England, he doubled the number of responsible defense officials to two – one for the army and one for navy!

The ships were largely rented from Genoa. Although many of them were sunk in the failed attack, Philip did not try to build a merchant fleet of his own to match Elizabeth’s rapid expansion of her armed merchant fleet at the same time.

That is from her new and excellent The Long Process of Development: Building Markets and States in Pre-industrial England, Spain and their Colonies, recommended.  This is essential reading for the history of colonial Mexico in particular.