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Rent-seeking, political influence and inequality: A simple analytical example

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Abstract

A simple model allowing an analysis of the interaction between economic policy decisions and rent-seeking by private agents competing for political influence, is developed. Rent-seeking may be of the directly unproductive type, requiring resources that are withdrawn from productive activities, or it may manifest itself as income transfers (corruption) to political decisionmakers.

In the political-economic equilibrium of the model the extent of rent-seeking, economic policy decisions, income inequality, etc. are endogenously determined.

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Authors and Affiliations

  1. Norwegian School of Economics and Business Administration, Helleveien 30, N-5035, Bergen-Sandviken

    Karl R. Pedersen

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  1. Karl R. Pedersen
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The author wants to thank Vegard Iversen for stimulating discussions.

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Pedersen, K.R. Rent-seeking, political influence and inequality: A simple analytical example. Public Choice 82, 281–305 (1995). https://doi.org/10.1007/BF01047698

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  • DOI: https://doi.org/10.1007/BF01047698

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