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Rent‐Seeking And Capital Accumulation

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  • PAULO BARELLI
  • SAMUEL DE ABREU PESSÔA

Abstract

A general model incorporating rent‐seeking activities in the standard neoclassical model of capital accumulation is presented. The welfare of the representative agent is negatively affected by the efficiency of rent‐seeking activities. Although intuitive, this result is not obvious because long‐run income can be positively affected by more efficient rent‐seeking activities. The model is used to provide explanations for some recent experiences in developing countries, including the relative poor performance of economies that experience a move to a more decentralized system and the observed path of total factor productivity (TFP) in countries like Ireland and Venezuela. (JEL D23, D74, O40, O41, O47)

Suggested Citation

  • Paulo Barelli & Samuel De Abreu Pessôa, 2012. "Rent‐Seeking And Capital Accumulation," Economic Inquiry, Western Economic Association International, vol. 50(2), pages 399-417, April.
    • Handle: RePEc:bla:ecinqu:v:50:y:2012:i:2:p:399-417
    DOI: j.1465-7295.2010.00318.x
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    Cited by:

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    2. Sergio, Reuben, 2012. "Fundamentos hipotéticos para investigar la crisis económica contemporánea [Hypothetical foundations to investigate the contemporary economic crisis]," MPRA Paper 43067, University Library of Munich, Germany, revised 14 Nov 2012.
    3. Jac C. Heckelman & Bonnie Wilson, 2013. "Institutions, Lobbying, and Economic Performance," Economics and Politics, Wiley Blackwell, vol. 25(3), pages 360-386, November.
    4. Reuben Soto, Sergio, 2012. "Fundamentos hipotéticos para proyectos de investigación sobre la crisis económica contemporánea [Hypothetical foundations for research projects on the contemporary economic crisis]," MPRA Paper 39591, University Library of Munich, Germany.
    5. Garfinkel, Michelle R. & Skaperdas, Stergios, 2007. "Economics of Conflict: An Overview," Handbook of Defense Economics, in: Keith Hartley & Todd Sandler (ed.), Handbook of Defense Economics, edition 1, volume 2, chapter 22, pages 649-709, Elsevier.
    6. del Río, Fernando, 2018. "Property Rights, Predation, and Productivity," MPRA Paper 86246, University Library of Munich, Germany.

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    More about this item

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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