Encyclopedia of Law and Economics

2019 Edition
| Editors: Alain Marciano, Giovanni Battista Ramello

Rent Seeking

  • Christopher J. CoyneEmail author
  • Garrett Wood
Reference work entry
DOI: https://doi.org/10.1007/978-1-4614-7753-2_414


This chapter explores the concept of rent seeking. When resources earn returns in excess of those they could earn in their next best opportunity, economists call those returns “rents.” In the market, the seeking of rents is known as profit seeking; in politics it is known as “rent seeking.” Profit seeking generates social value through the competitive market process. Rent seeking results in social losses as finite resources are used to pursue transfers of wealth rather than in the production of new wealth. This entry explores the distinction between rent seeking and profit seeking and discusses the implications.


Economic rent accrues to owners when their resources earn returns over and above those resources’ opportunity cost. Rents can exist in private markets or in political settings. In private markets, rent seeking is referred to as “profit seeking” to denote that it generates a social surplus that is beneficial to society. In contrast, in political settings...

This is a preview of subscription content, log in to check access.


  1. Baumol W (1990) Entrepreneurship: productive, unproductive, and destructive. J Polit Econ 98(5):893–921CrossRefGoogle Scholar
  2. Baysinger B, Tollison R (1980) Evaluating the social costs of monopoly and regulation. Atl Econ J 8(4):22–26CrossRefGoogle Scholar
  3. Buchanan JM (1980) Rent seeking and profit seeking. In: Buchanan J, Tollison R, Tullock G (eds) Toward a theory of the rent-seeking society. Texas A&M University Press, College Park, pp 3–15Google Scholar
  4. Del Rosal I (2011) The empirical measurement of rent-seeking costs. J Econ Surv 25(2):298–325CrossRefGoogle Scholar
  5. Harberger A (1954) Monopoly and resource allocation. Am Econ Rev 44(2):77–87Google Scholar
  6. Kirzner I (1973) Competition and entrepreneurship. University of Chicago Press, ChicagoGoogle Scholar
  7. Kirzner I (1992) The meaning of the market process: essays in the development of modern Austrian economics. Routledge, New YorkCrossRefGoogle Scholar
  8. Kirzner I (1997) Entrepreneurial discovery and the competitive market process: an Austrian approach. J Econ Lit 35(1):60–85Google Scholar
  9. Krueger A (1974) The political economy of the rent-seeking society. Am Econ Rev 64(3):291–303Google Scholar
  10. Olson M (1982) The rise and decline of nations: economic growth, stagflation, and social rigidities. Yale University Press, New HavenGoogle Scholar
  11. Peltzman S (1976) Toward a more general theory of regulation. J Law Econ 19(2):211–240CrossRefGoogle Scholar
  12. Posner R (1975) The social costs of monopoly and regulation. J Polit Econ 83(4):807–827CrossRefGoogle Scholar
  13. Rama M (1993) Rent seeking and economic growth: a theoretical model and some empirical evidence. J Dev Econ 42(1):35–50CrossRefGoogle Scholar
  14. Tollison R (1982) Rent seeking: a survey. Kyklos 35(4):575–602CrossRefGoogle Scholar
  15. Thomsen EF (1992) Price and knowledge: a market-process perspective. Routledge, New YorkCrossRefGoogle Scholar
  16. Tullock G (1967) The welfare costs of tariffs, monopolies, and theft. West Econ J 5(3):224–232Google Scholar
  17. Tullock G (2001) Efficient rent seeking. In: Lockhard A, Tullock G (eds) Efficient rent-seeking: chronicle of an intellectual quagmire. Kluwer Academic Publishers, Norwell, pp 3–16CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2019

Authors and Affiliations

  1. 1.Department of EconomicsGeorge Mason UniversityFairfaxUSA