The 1930-45 period was of important innovation in the field of rent-seeking in
addition to coffee support and high tariff. The economics of the foreign exchange
wedge between export and import rates became a vital aspect of economic policy in
Brazil at least until the mid-1960’s. The proliferation of normative sectoral agencies,
many of them with ample regulatory mandate, created important sources of
inefficiency. But in many instances the government opted for public ownership
because there was no interest by the private sector. Macroeconomic policy, which
had been under reasonable control for most of Vargas’ first period, deteriorated
considerably in the last years of the war with a high rate of inflation and a grotesquely
overvalued exchange rate.