Question

How did Portugal and Spain govern their colonies to promote economic gain and exert their authority?

Answer 1

They effectively enslaved the native populations so to extract labour from them and then all the benefits of this labour going to the Spanish and Portuguese.

Answer 2

Through a complex system of control under the dominated regions. Taking advantage of the religious justification and the great commercial interest of the Crown, Spain and Portugal presented habits, institutions, and men that guaranteed the operation of the logic of Hispanic exploration. At the regional level, there were still cabildos (or town councils), which functioned as municipal councils tasked with solving local issues. All positions of the high administrative rank of the Spanish Crown were dominated by a specific group. Only the individuals born in Spain, called chapetones, could occupy these positions.

Soon after, there was a local elite who had control over commercial and agro-export activities. The criollos formed an elite born in American soil that, by determination of the colonial administration, did not enjoy the same political privileges of the chapetone class. This type of separation caused great conflicts between criollos and chapetones in Spanish America.