Corruption and Rent-Seeking
The rent-seeking theory was one of the first economic instruments developed to model corruption in the public sector. Comparing corruption with lobbying, it proposes that the former is the lesser of two evils, since lobbying entails the wastage of resources in the competition for preferential treatm...
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| Published in | Public choice Vol. 113; no. 1/2; pp. 97 - 125 |
|---|---|
| Main Author | |
| Format | Journal Article |
| Language | English |
| Published |
Dordrecht
Kluwer Academic Publishers
01.10.2002
Springer Nature B.V |
| Subjects | |
| Online Access | Get full text |
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| Abstract | The rent-seeking theory was one of the first economic instruments developed to model corruption in the public sector. Comparing corruption with lobbying, it proposes that the former is the lesser of two evils, since lobbying entails the wastage of resources in the competition for preferential treatment. This study shows that the traditional rent-seeking theory misunderstands three factors: first, the impact of a corrupt monopoly on the rent's size; second, corruption as a motivation for supplying preferential treatment and third; that corruption involves a narrower range of interests than those of competitive lobbying. Taking these factors into consideration, the opposite argument is valid: corruption has worse welfare implications than alternative rent-seeking activities. |
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| AbstractList | The rent-seeking theory was one of the first economic instruments developed to model corruption in the public sector. Comparing corruption with lobbying, it proposes that the former is the lesser of two evils, since lobbying entails the wastage of resources in the competition for preferential treatment. This study shows that the traditional rent-seeking theory misunderstands three factors: first, the impact of a corrupt monopoly on the rent's size; second, corruption as a motivation for supplying preferential treatment and third; that corruption involves a narrower range of interests than those of competitive lobbying. Taking these factors into consideration, the opposite argument is valid: corruption has worse welfare implications than alternative rent-seeking activities. [PUBLICATION ABSTRACT] The rent-seeking theory was one of the first economic instruments developed to model corruption in the public sector. Comparing corruption with lobbying, it proposes that the former is the lesser of two evils, since lobbying entails the wastage of resources in the competition for preferential treatment. This study shows that the traditional rent-seeking theory misunderstands three factors: (1) the impact of a corrupt monopoly on the rent's size; (2) corruption as a motivation for supplying preferential treatment; & (3) corruption involves a narrower range of interests than those of competitive lobbying. Taking these factors into consideration, the opposite argument is valid: corruption has worse welfare implications than alternative rent-seeking activities. 71 References. Adapted from the source document. The rent-seeking theory was one of the first economic instruments developed to model corruption in the public sector. Comparing corruption with lobbying, it proposes that the former is the lesser of two evils, since lobbying entails the wastage of resources in the competition for preferential treatment. This study shows that the traditional rent-seeking theory misunderstands three factors: first, the impact of a corrupt monopoly on the rent's size; second, corruption as a motivation for supplying preferential treatment and third; that corruption involves a narrower range of interests than those of competitive lobbying. Taking these factors into consideration, the opposite argument is valid: corruption has worse welfare implications than alternative rent-seeking activities. |
| Author | Lambsdorff, Johann Graf |
| Author_xml | – sequence: 1 givenname: Johann Graf surname: Lambsdorff fullname: Lambsdorff, Johann Graf |
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| Snippet | The rent-seeking theory was one of the first economic instruments developed to model corruption in the public sector. Comparing corruption with lobbying, it... |
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| SubjectTerms | Competition Corruption Corruption in government Decision making Economic competition Economic costs Economic models Economic regulation Economic rent Economic Theories Economic theory Economics Efficiency Fines & penalties Game Theory Government corruption Lobbying Monopoly Political corruption Politicians Principal-agent theory Public choice Public sector Rent seeking behavior Rent-Seeking Studies Subsidies Theoretical Problems Welfare Welfare economics |
| Title | Corruption and Rent-Seeking |
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