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.
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References in periodicals archive ?
If there is no rent seeking in the economy, we have:
Under certain economic conditions, agents with sufficiently high skill would find it optimal to engage in rent seeking rather than innovation.
(1991) argue that official corruption diverts resources and talent away from real investments into political rent seeking: lobbying politicians, influencing judges, and currying favor with bureaucrats.
Just recently some authors have paid attention to the rent seeking in universities, through the behavior of scholars and committees (Diamond, 1993; Tullock, 1993).
Thus, in the post-independence society, rent seeking, bureaucratic corruption, and other opportunistic behaviors became endemic.
After a brief introductory chapter, chapters 2 and 3 review familiar public choice theorizing about rational decision making, markets, public goods, rent seeking, and government.
The final section of the book looks at rent seeking and Irish enterprise.
"Efficient Rent-Seeking." In Toward a Theory of the Rent Seeking Society, edited by James M.
Bates sees such interventionist policies transforming the neutral economy into a political machine, creating personalizm, patronage and ample opportunities for rent seeking. Grosh pushes the points home.
Although rent seeking certainly characterized many societies in the past as well as the present, that alone is scarcely sufficient to stifle growth altogether.
they have made their fortunes by privatizing profits and socializing losses in joint ventures with the public sector, by taking advantage of monopoly markets granted by the state, and by other arrangements with rent seeking bureaucrats and politicians.(82)
Rent seeking and its consequences are examined in the context of "optimal" zoning--zoning that maximizes aggregate landbased benefits in the community.