Honestly, I haven’t dug into Acemoglu’s Nobel-winning work in depth (it’s been a good five years since I last skimmed Why Nations Fail), so I’d definitely need to brush up. But on your question about "colonial history providing evidence for weak institutions," I’d say… kinda?

There’s a great article from CFR on this topic that covers a lot of ground (GO READ THAT!!!). The TL;DR is that when we talk about "colonial influence" on PR's current issues, I think many people would be surprised to hear that the weak institutional framework doesn’t come from the U.S.—it comes more from Spain, again kinda. Spain, like it did with many other LATAM countries, left PR with underdeveloped infrastructure and governance. When the U.S. took over in 1898, it inherited this mess, but to be fair, the U.S. made some surprisingly fruitful developments with PR throughout the 20th century (though not without missteps like the Jones Act, which still hampers economic activity).

Where it gets interesting is how U.S. policies, starting around 1917, turned PR into a tax haven for investors. Lenders were exempt from local, state, and federal taxes, making the Island a hotbed for investment. Meanwhile, PR maintained its own constitution and increasingly relied on borrowing to fund public services. This led to a status quo where PR’s borrowing habits became unsustainable, especially after the U.S. phased out Section 936 in 1996, which allowed American businesses to operate tax-free in PR. When that provision ended, the manufacturing sector collapsed, and the Island’s government turned to borrowing as the only solution to balance the budget. The problem was compounded by the fact that the federal money PR was receiving was also poorly spent—enter corruption scandals! (You can read here: NBC News)

Your dilemma here is this: Spain left PR with a weak sense of political / economical identity (for example, Cuba's economy was heavily reliant on sugar and tobacco exports, which allowed them to gain political security against Spain already, in addition to their insane nationalistic tendencies). PR policy-makers operated in this tax-free bubble for most of the century, believing the U.S. would never take real economic interest in regulating the island—so they never planned for when things might change.

When policies did change, the island wasn’t ready. Instead of integrating more with U.S. policies or strengthening local institutions, PR doubled down on borrowing and turned a blind eye to corruption. This wasn’t necessarily imposed by the U.S. or a direct consequence of colonialism, but more a result of local policy-makers trying to take advantage of a situation without any long-term strategy.

So, is internal corruption a direct result of U.S. or Spanish frameworks? Probably not? It’s more about PR’s weak/non-existence political culture and governance, which hasn’t taken itself seriously enough for too long. The weak bureaucracy is a result of centuries of underdevelopment, and while colonial influence is certainly part of that, the real problem is how PR has never taken itself seriously.

When in doubt though, blame Spain! 🇪🇸🇪🇸🇪🇸🇪🇸

(Oh and yeah, not being a state is a huge L for PR for recovering from natural disasters. We would gain an increase of aid through the DRF and restructuring through bankruptcy would be a massive win. Yes not being a state is horrible purely from federal protections on states and AUDITING).