Abstract
Some government programs and policies reduce wealth through rent creation. In this paper we focus on the theory of rent-seeking, and armed with an analytical model of the rent-seeking process, we make three basic points. First, we explain why perfect dissipation of rents is not equivalent to a competitive return to rent-seeking. Second, we demonstrate that the social cost of rent creation may be smaller when all rents are dissipated by rent-seeking than when no rents are dissipated. Third, we explain that regardless of whether rents are dissipated in transferring them, there is a distribution effect of rent-seeking that has been ignored in the literature.
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© 1988 Springer Science+Business Media New York
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Higgins, R.S., Tollison, R.D. (1988). Life Among the Triangles and Trapezoids: Notes on the Theory of Rent-Seeking. In: Rowley, C.K., Tollison, R.D., Tullock, G. (eds) The Political Economy of Rent-Seeking. Topics in Regulatory Economics and Policy, vol 1. Springer, Boston, MA. https://doi.org/10.1007/978-1-4757-1963-5_13
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DOI: https://doi.org/10.1007/978-1-4757-1963-5_13
Publisher Name: Springer, Boston, MA
Print ISBN: 978-1-4419-5200-4
Online ISBN: 978-1-4757-1963-5
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