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 ?
Of course, there are 'holy cows' within this circle, and they will continue reaping the fruits of their rent-seeking behavior.
Wealth gained by extractive, rent-seeking behavior is one element of unacceptable wealth.
However, when a democratic choice is the product of rent-seeking behavior, it is unlikely to be overturned owing to what Tullock (1975) calls "the transitional gains trap," wherein the recipients of rent-seeking gains will strongly oppose any attempt to reverse their parochial benefits.
This seems counterintuitive, and indeed some forms of regulation serve to enable rent-seeking behavior. Businesses in oligopolistic sectors often complain about the burden of compliance; but they clearly rely on regulation as a barrier to market entry by new competitors.
But the proposed coverage of provisions on competition include mandating the State to regulate markets lacking in sufficient competition and prohibit inefficient market structure to promote economic welfare, to ensure free and fair competition and enhance efficient resource allocation, to establish 'equal' legal conditions under which all business entities and enterprises shall operate, to prohibit anticompetition agreements (including anticompetitive mergers and acquisitions, rent-seeking behavior) and abuse of dominant position, and to prohibit undue advantage for any enterprise.
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.
Although this increases the rent-seeking behavior, yet it leads to higher growth since the investors make long-term investments.
Additionally, an emissions trading system, unlike a carbon tax, encourages rent-seeking behavior (Nordhaus 2007, p.
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.
By James Alic Garang November 23, 2013 - For the starters, Central Bank of South Sudan issued a circular entitled "Exchange Rate Reforms" on 11 November 2013 to devalue its currency from about 3.16SSP/$1 to 4.5SSP/$1 with goal of unifying the official and black market exchange rates, thereby achieving its immediate target of lowering "short-term exchange rate volatility" and clamping down on "rent-seeking behavior" as well as stimulating the economy.