This article discusses the economic long-run development of Uruguay since 1870 by looking at convergence and divergence with leading capitalist countries. On the basis of broad historical data is shown that contrary to traditional assumptions the divergence with central capitalist countries increased during periods of export-oriented as well as protectionist trade-regimes. The causes for this development are not only to be found in the degree of openness of the economy, but, as the historical analysis shows, also in different institutional settings, the role of the state and the patterns of productive specialisation in relation to the behaviour of demand and technological changes. Historical periods which are characterised by different trade-regimes can be distinguished. The actual period – the integration-process of Mercosur – is also part of the detailed analysis. At this point the author stresses that a significant process of convergence cannot be achieved, if real wages and other social indicators do not move upwards.
