Measuring rent-seeking

Laband, David N.; Sophocleus, John P.

doi:10.1007/s11127-018-0566-9

Cited by 20 publications

(8 citation statements)

References 28 publications

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“…If the government intervenes in a coercive way in the market process, it will destroy the entrepreneurial capacity to create the information required to achieve dynamic efficiency, and if it does not intervene, it does not obtain any information either [57]. Third, central planning results in the "corruption effect": the coerced human beings perceive that they stand a better chance of achieving their goals if they devote their time, effort and intellect to influence political decision-making [63]. Thus, central planning legitimizes rent-seeking behavior, weakening the dynamic efficiency of the market process.…”

Section: Theoretical Framework and Methodologymentioning

confidence: 99%

The Political Economy of Rent-Seeking: Evidence from Spain’s Support Policies for Renewable Energy

2021

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This paper provides a theoretical framework to explore how the support policies for renewable energies can promote rent-seeking incentives in private firms. We develop a political economy of rent-seeking that considers the link between the regulatory decisions of political agents and the potential scope of socially wasteful pursuits. We argue that systematic public support schemes bring rent-seeking as a perception shared by entrepreneurs that influencing political allocations of resources is an essential and potentially preferable source of private profit than other for-profit economic avenues. As evidence of our claims, the framework is applied to the case of Spain to illustrate the economic effects of support policies on the production and distribution of renewable energy. We find rent-seeking behavior in Spain’s renewable energy industry, and precisely that: (i) political regulations have induced market concentration and rent-seeking in renewable energy firms, (ii) these firms have required increasing regulations and premiums to survive, and (iii) energy consumers are forced to pay rent-seeking through increasingly expensive electricity bills. The analysis reveals some challenges and opportunities to drive efficient market-based policies to strengthen entrepreneurial competition and curb rent-seeking behavior. These insights have relevant proposals for the Spanish energy industry in complying with the EU Green Deal through a sustainable transition and comprehensive growth.

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Section: Theoretical Framework and Methodologymentioning

confidence: 99%

The Political Economy of Rent-Seeking: Evidence from Spain’s Support Policies for Renewable Energy

2021

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“…As Tullock (1997) noted, the theoretical analysis of rent-seeking has often been hampered by a lack of conceptual clarity. A breakthrough paper by Laband and Sophocleus (2019) establishes much-needed clarity. They distinguish between natural rents , such as those that flow to someone with the abilities needed to be an NBA player, from contrived rents , which involve exclusivities that involve socially unproductive rent-seeking.…”

Section: Theoretical Considerationsmentioning

confidence: 99%

Informal Institutions as Inhibitors of Rent-Seeking Entrepreneurship: Evidence From U.S. Legal History

Smith

Brownlow

2022

Entrepreneurship Theory and Practice

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Rent-seeking entrepreneurship occurs whenever an entrepreneur expends resources on activities that benefit their firm while reducing overall economic efficiency. Since rent-seeking ultimately makes nations poorer, we need to know more about how institutions can discourage rent-seeking entrepreneurship. Using historical data from the Unites States, we explore how changes in judicial thinking altered individuals’ incentives to engage in rent-seeking entrepreneurship. Traditionally, entrepreneurship researchers interested in policy issues have paid little attention to changes in judicial thinking. We argue that entrepreneurship researchers who are interested in why levels of entrepreneurial dynamism vary over time should pay more attention to how judges think.

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“…Rent-seeking is notoriously difficult to study empirically due to the lack of data (Laband and Sophocleus, 2019). However, rent-seeking effort is conceptually clear and, at least in principle, measurable.…”

Section: Contest Success Functionmentioning

confidence: 99%

A partially exclusive rent-seeking contest

Leppälä

2021

Journal of Economic Behavior & Organization

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Measuring rent-seeking

Cited by 20 publications

References 28 publications

The Political Economy of Rent-Seeking: Evidence from Spain’s Support Policies for Renewable Energy

The Political Economy of Rent-Seeking: Evidence from Spain’s Support Policies for Renewable Energy

Informal Institutions as Inhibitors of Rent-Seeking Entrepreneurship: Evidence From U.S. Legal History

A partially exclusive rent-seeking contest

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