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Endogenous Trade Policy: A Time‐Series Approach

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  • Martín Rama

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.

Suggested Citation

  • Martín Rama, 1994. "Endogenous Trade Policy: A Time‐Series Approach," Economics and Politics, Wiley Blackwell, vol. 6(3), pages 215-232, November.
    • Handle: RePEc:bla:ecopol:v:6:y:1994:i:3:p:215-232
    DOI: 10.1111/j.1468-0343.1994.tb00098.x
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    References listed on IDEAS

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    1. repec:bla:kyklos:v:42:y:1989:i:4:p:515-32 is not listed on IDEAS
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    9. Rama, Martin, 1993. "Rent seeking and economic growth : A theoretical model and some empirical evidence," Journal of Development Economics, Elsevier, vol. 42(1), pages 35-50, October.
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    Cited by:

    1. César Calderón & Alberto Chong, 2006. "Rent Seeking and Democracy in Latin America: What Drives What?," Research Department Publications 4435, Inter-American Development Bank, Research Department.
    2. César Calderón & Alberto Chong, 2006. "Búsqueda de rentas y democracia en América Latina: ¿Qué impulsa a qué?," Research Department Publications 4436, Inter-American Development Bank, Research Department.
    3. Madani, Dorsati & Olarreaga, Marcelo, 2002. "Politically optimal tariffs : an application to Egypt," Policy Research Working Paper Series 2882, The World Bank.
    4. Cesar Calderon & Alberto Chong, 2006. "Do Democracies Breed Rent-seeking Behavior?," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 9(4), pages 247-260.
    5. Paldam, Martin, 1997. "Dutch disease and rent seeking: The Greenland model," European Journal of Political Economy, Elsevier, vol. 13(3), pages 591-614, September.
    6. Michael Hoffman, 2005. "Discretion, Lobbying, and Political Influence in Models of Trade Policy," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 8(3), pages 175-188.
    7. César Calderón & Alberto Chong, 2007. "Rent Seeking And Democracy: Empirical Evidence For Uruguay," Economic Inquiry, Western Economic Association International, vol. 45(3), pages 592-601, July.

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