The Uruguayan political-economic regime could be best understood as an “Oligarquía Terrateniente Decimonónica”, a system that originated in the 19th century but evolved into a stability-oriented governance model. This regime preserved landowners’ interests while integrating urban sectors through a corporatist welfare state, producing a peculiar combination of political stability and economic rigidity.

Uruguay’s mercantilism does not seek to dominate external markets like classic European or Asian models. Instead, it creates internal rents to pacify competing domestic sectors, ensuring landowners remain shielded, while cooperatives and unions feel protected. In this model, the state acts as broker, maintaining elite cohesion. Foreign investors who expect liberalization often find themselves subsidizing this internal balance. However, they benefit from this regime through mercantilism as a “stability rent”

While Uruguay’s stability is marketed as “rule of law and democracy”, its durability is equally supported by this underlying mercantilist logic: protecting landed elites from global price shocks, sustaining urban corporatist groups (e.g., middle class of Montevideo, bureaucracy, unions) with state-backed rents, and limiting disruptive foreign competition that could unsettle domestic power balances. Moreover, mercantilism does not directly favor innovation; it favors preservation. It rewards insiders—those who know the system, not those bringing new capital or ideas.

The renewable energies boom is a prime example of how Uruguay’s “stability narrative” creates safe havens for rent-seeking capital. In this regard, the negotiated legal certainty, dollar contracts and political consensus are perfect environment for low-risk extraction. Thus, elite consensus on the “clean energy success” story prevents public scrutiny on the profitability of concessions. The opposition voices (mainly from industry and small business sectors)arguing about high energy costs face the narrative of “stability” and “green progress”.

State-driven private investment in Uruguay’s renewable energy sector, particularly wind power, have reaped significant profits from long-term, state-backed concession agreements. This is another dimension of current regime in Uruguay that benefits capital-intensive, low-operational-risk sectors, but may burden the broader economy and consumers.