Monaco and Monegasque things are a bit of a hobby of mine. When I was at university somewhere in the foggy North of Italy, by a strange sequence of accidents I became as a writer for a not-entirely-unknown web publication. The pay was abysmal, the assignments uninteresting, and the editors dull, but I stayed in the job as once every few months assignments allowed me a reimbursable railway trip to various locations in Italy. The most coveted assignments were invariably in Monaco, where conference and event organizers were in the habit of gifting multi-day hotel stays to anyone with a half-baked press credential.

All this to say I have a certain affection for the history and people of the Monegasque principality, and kept quiet when in my activist days (still at university) another member of the section decried it as a "Parasitic hive of tax evasion, corruption, and debauchery." While I was (and probably never will be) wealthy enough to confirm these accusations firsthand, they are easy to corroborate and thus I do not view the bizarre principality with an entirely uncritical eye.

Indulgent reminiscing of my student days aside, why didn't the Monegasque develop the eastern part of the Principality until after the Second World War?

The modern Monegasque cityscape looks to cram as many tax-evading retirees as mathematically possible inside the principality's borders. As I am sure your initial search has already revealed to you, this cityscape is completed by waterfront hotels which were first built to accommodate visitors to the Casino, the old town on the promontory of Monaco itself, and a football stadium home to a club which, through ups and downs, is able to mount a title challenge in the French League about once per decade. This cityscape is predictably characterized by a combination of modern high-rises as well as dense townhouses in a variety of Italianate and Provencal styles. As you have correctly pointed out, this urban texture is mostly modern, having been built up over the past seventy years.

Historically, Monaco was a much different place. Tax evasion, gambling, and bribing semiprofessional reporters to cover obscure conventions were not always the primary vocations of the monegasque. Up until the Napoleonic Wars the principality was a fief of the Grimaldi dynasty, a middling patrician family of the Republic of Genoa, and would have derived most of its wealth from through-traffic on its way to the genoese entrepôt (in addition to fishing and farming, with dues on cash crops a particularly lucrative source of income). From the 14th century to 1861 the grimaldian fief was also substantially larger than the modern principality, stretching from the fortress of Monaco eastward along the coast all the way to the hamlet of Garavano. Thus the most important settlement was not the community of Monaco, but instead the substantially larger town of Mentone some six miles to the east. In other words, development was always focused east of Monte-Carlo, it is simply no longer within the borders of the modern principality!

The fervor of popular revolt that characterized the long century would have both positive and negative effects for the principality. When the Kingdom of Sardinia-Piedmont (itself a haphazard invention of the Congress of Vienna) ceded the counties of Nice and Savoy to Napoleon III's French Empire in exchange for military aid in the struggle to unify Italy, Prince Charles III of Monaco pulled off an astounding coup in extracting his fief from the cession of the Country of Nice. However, recognition of sovereignty would come at a harsh price, as the townspeople of Mentone had revolted against their princely overlords and were annexed by Napoleon III's Empire in 1861 as a condition in the very same treaty that recognized Monaco's sovereignty.

The fortunes of the small Principality of Monaco would thereafter be tied to the Casino (at least until the proliferation of the wire transfer) in which the Grimaldi were major investors. The idea, already pioneered in minor German principalities, was to elevate gambling from dens and theater lobbies and transform it into an activity that would attract a consistent, and refined, clientele. The plan was not without some naïveté, as when the casino was founded in 1856 Monaco was not exactly full of aspiring baccarat players, however Prince Charles and particularly his mother Princess Caroline insisted: architects, managers, and investors would be reeled in from France, Germany, and Italy in order to make the envisioned casino a luxurious reality. Somewhat arbitrarily, Monegasque citizens themselves were (and still are!) banned from gambling in the casino; a decision which severely limited the number of visitors in the Casino's early days. While the the number of wealthy holiday-makers that would become ubiquitous in the South of France had been growing since 1830s, roads were in poor condition and the Principality lacked suitable accommodations for the kinds of visitors the casino's investors wanted to attract. Only in 1863 would the Grimaldi and their management company, Société des bains de mer de Monaco, build a luxurious hotel (the Hôtel de Paris) and things would only really pick up in 1867 with the completion of the railway connection to Nice (the largest city and transport hub for the French Riviera).

While the Société des bains de mer's name might point towards developing beachgoing activities, its primary activity was running the casino and hotel. The Société des bains was also given free hand to develop the casino's surrounding neighborhood (this included activities as disparate as paving roads and installing lampposts). This new quarter on a hill across the harbor from the old town would be named "Monte Carlo" after Prince Charles. Development was slow, as even with its new casino the Principality was nonetheless competing with the amenities of innumerable other towns on the riviera. In 1868 the Café Divan was built across from the Hotel, completing three sides of the Casino Square. Ten years later the Casino was enlarged, and Charles Garnier was brought in from Paris to build an opera house behind it. These are indications of slow and steady growth to be sure, and rich and famous visitors began to make appearances (Alexandre Dumas, Jacques Offenbach, and Baron Haussmann, among others, "Wintered" in Monaco at least once) but only in 1890 would the Société des bains de mer feel the need (and find the means) to build a second luxurious hotel (the Hôtel Hermitage) located directly behind the Hotel de Paris. Thus while successful, we are hardly looking at a meteoric increase in residents and visitors warranting stretching development down the coast.

Proximity to the casino as well as proximity to the railway station (which at the time was down the road from the casino) were the primary considerations that drove the developers of the Société des bains de mer. Emphasis on extravagant constructions (commissioning expensive architects from Paris) also kept growth slow. After the turn of the 20th century, growth in Monaco would even be threatened as the casino faced new challengers on both sides of the Riviera (notably in Cannes and San Remo, but also in alternative vacation spots like Aix en Provence and Venice). While lounging on a deck chair by the beach was certainly a contemplated activity, it would not be considered a possible driver of revenue until 1929, when a newly hired American executive pushed the Société des bains de mer to build the "Monte-Carlo Beach" hotel just outside the principality's eastern border (even golf arrived to Monaco before a beachfront resort did, as in 1911 the Société des bains de mer built a golf club in the hills overlooking the principality). Indeed, preference for beachfront property along the monegasque shoreline would emerge out of necessity as much as out of preference in the post-war era. Prince Rainier III made a concentrated effort to diversify the principality's economic activity, with the consequence (be it intentional or unintentional) of attracting businesses and businesspeople looking to flee Europe's characteristically high taxes. Fiscal relaxation coupled with the decolonization process saw some wealthy overseas french, notably Algerian Pieds-Noirs, choose settle in Monaco (the Pieds-Noirs had notably benefitted from a favorable taxation system in Algeria, which some were unwilling to give it up).

The rapid growth of Monaco did not go unnoticed, especially by the French government which began considering the principality a thorn-in-the-side. Prince Ranier's attempts to diversify the monegasque economy via the re-nationalization of the RMC radio network further aggravated the relationship between the two countries. Disagreements on applicability of French taxes on monegasque residents escalated to the point of provoking an hour-long customs blockade in October 1962. Alongside the concurrent Cuban Missile Crisis, Parisian newspapers cynically remarked that the blockade carried out by six specially deployed customs officers had the atmosphere of some sort of prank. However, the blockade and other pressures were effective in making the principality cave in and allow french nationals to be taxed at french rates (with the only exception made for those who arrived before 1957). Although immigration from France slowed, foreigners from further afield continued to arrive seeking a favorable tax environment (notably from Italy and Great Britain) and development would continue to grow denser. By this point, development all over the principality was well underway, and the easternmost part of the principality would even be the focus of land reclamation efforts between 1960 and 1965.

Final thoughts are posted as a response to this reply.