Uruguay: The Rise of a Monocentric Economy

We explore the impacts of urban primacy on Uruguayan economic development, with a focus on the late nineteenth and early twentieth century. We argue that Montevideo’s primacy produced a dualistic economic geography (city-port/countryside) without intermediate towns of an even remotely comparable scale. The lack of a network of cities translated into physical infrastructure, notably through a dendritic railway design where would-be secondary towns were not connected to each other. Primacy became an obstacle to the development of a more diversified territorial division of labor and limited the emergence of new clusters, especially in sectors associated with industrialization. Such a monocentric economy was ill-suited for structural change, contributing to Uruguay’s mediocre twentieth-century growth record and its continued divergence from the world’s leading economies.