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In Search of Rent-Seeking

  • Michael A. Brooks
  • Ben J. Heijdra
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Part of the Topics in Regulatory Economics and Policy book series (TREP, volume 1)

Abstract

Over the last five or so years a good deal has been written on the topic of rent-seeking.1 It is hard, however, to feel satisfied with the existing state of the literature: terminological and paradigmatic differences abound; there does not appear to be any consensus on an analytical core, and few of the existing results are accepted widely. Basically there is little agreement between the school of thought which labels these activities as rent-seeking and the other which places them under the general rubric of directly unproductive expenditure (hereafter DUPE). The aim of this paper is to critically analyze some of the existing themes in the literature and clarify the direction in which this area of research should turn. We begin by inquiring whether the rent-seeking process as envisaged by the DUPE school offers a satisfactory explanation of why certain forms of competition should be considered as wasteful. We then argue that the rent-seeking school has offered a fundamentally different explanation of why competition can be wasteful. We couch our discussion in terms of a general equilibrium model of the rent-seeking process. We discuss different waste measures to be derived from our model. In light of these discussions, we explore the idea that the central insight of the rent-seeking literature has been emasculated by the use of static equilibrium models. Finally, we present the main conclusions to be drawn from the paper. Some tangential issues are dealt with in an appendix. It should be mentioned at the outset that no attempt is made here to exhaustively survey all of the literature on rent-seeking. The object is to explore what we see as some of the major weaknesses and problems in this field, and to suggest a fundamental reorientation of the literature.

Keywords

Utility Function Demand Curve Free Lunch Welfare Cost Lobbying Effort 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer Science+Business Media New York 1988

Authors and Affiliations

  • Michael A. Brooks
  • Ben J. Heijdra

There are no affiliations available

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