Abstract
This paper provides a time‐series analysis on the relationship between the extent of endogenous trade policy and both political and economic variables. The chosen trade policy indicator is the number of foreign‐trade regulations passed each year for the benefit of a single firm or industry. The data are from Uruguay, 1925–1983. This country, which experienced an impressive economic decline, is an outstanding example of the rent‐seeking society. The paper shows that endogenous regulations increased with discretionary policies, with adverse macroeconomic shocks and under dictatorship. It also shows that these regulations had a negative long‐run effect on the growth rates of output and exports. The short‐run effect was positive however.
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