Rent-Seeking

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Rent-Seeking

The practice of an individual, company, or government attempting to make a profit without making a product, producing wealth, or otherwise contributing to society. For example, a company may seek subsidies from the government, which would count as income for that company. Likewise, a government may seek rent by seizing control of natural resources and charging citizens for use. Some rent seeking is legal, while others, such as some forms of blackmail, are not. Rent-seeking behavior is most common when the rent seeker is also a monopoly or has sufficient economic or political power to act as one. The concept was originated by Adam Smith.
References in periodicals archive ?
Hence, people from all walks of life fall easy prey to persistent pyramid scams, and business people choose to put their creativity, energy and resources in rent-seeking behavior like lobbying and buying public officials rather than in improving efficiency and productivity.
Tax and spending policy, and often nonpolicy, in Washington reflects a constantly changing of the rules and rent-seeking behavior that adds little, if any, to the general welfare of the economy.
Tullock responded that judges and lawyers may engage in rent-seeking behavior to maintain inefficient rules that line their own pockets.
Also, the gigantic bureaucracy stimulates corruption and rent-seeking behavior.
Although this increases the rent-seeking behavior, yet it leads to higher growth since the investors make long-term investments.
At the same time, rent-seeking behavior has been apparent in some communities where they have organized themselves, not with the intention of collectively resolving local problems, but rather appropriating oil rent for individual enrichment.
Additionally, an emissions trading system, unlike a carbon tax, encourages rent-seeking behavior (Nordhaus 2007, p.
Profit maximizing developers acting within the confines of bounded rationality may therefore negotiate inequitable terms and engage in rent-seeking behavior, as would be predicted by transaction cost economics (Nijkamp et al.
In short, rent-seeking behavior is chronic in modern Greek society, resulting in the emergence of a generally inefficient institutional economic framework that is financed through a dramatically expanding public deficit and public debt and supported by a strong continental currency, the euro.
International aid may reduce the incentive for domestic savings mobilization as political elites engage in rent-seeking behavior, thus fostering corruption, which adds to the level of aggregate country risk.
However, impunity, corruption, and related rent-seeking behavior continue to impede progress in combating trafficking in persons.
They proposed a syncretic model of rent-seeking behavior with four quadrants (competitive, monopolistic, collaborative, and syncretic) and posited that syncretic rent-seeking behavior (high levels of both collaborative and competitive activities) would benefit a particular firm more so than competition or cooperation alone.