rent-seeking
Sign in to saveRent-seeking is the act of growing one's existing wealth by manipulating public policy or economic conditions without creating new wealth. Rent-seeking activities have negative effects on the rest of society. They result in reduced economic efficiency through misallocation of resources, stifled competition, reduced wealth creation, lost government revenue, heightened income inequality, heightened debt levels, risk of growing corruption and cronyism, decreased public trust in institutions, and potential national decline.
Article
18 sectionsContents
- Theory
- Georgist
- Relation to profit-seeking
- Tullock paradox
- Regulatory capture
- Incentives
- Moral hazard
- Illegal
- Economic effects
- Criticism of theories
- Examples
- Corruption
- Licensing
- Subsidies
- See also
- References
- Further reading
- External links
Rent-seeking is the act of growing one's existing wealth by manipulating public policy or economic conditions without creating new wealth. Rent-seeking activities have negative effects on the rest of society. They result in reduced economic efficiency through misallocation of resources, stifled competition, reduced wealth creation, lost government revenue, heightened income inequality, heightened debt levels, risk of growing corruption and cronyism, decreased public trust in institutions, and potential national decline.
Successful capture of regulatory agencies (if any) to gain a coercive monopoly can result in advantages for rent-seekers in a market while imposing disadvantages on their uncorrupt competitors. This is one of many possible forms of rent-seeking behavior.