ABSTRACT
Uruguay and Paraguay, two of the smallest nations of South America, are often confused one with another because their names are so similar. International prices for some traditional Uruguayan exports rose, with a consequent improvement of the balance of payments. The most significant change, however, was in the composition of Uruguayan exports. An external factor that may have heavily influenced the Uruguayan process is the involvement of more powerful neighboring states in internal power struggles. Between 1954 and the early 1970s, the Paraguayan economy was characterized by very low rates of growth within the framework of a traditional social structure with widespread precapitalist forms of production in the countryside. The most important consequence of the rapid process of economic modernization, however, is the parallel process of social mobilization that is, in turn, greatly increasing social and economic demands on the political system.
