Rent Seeking, Technology Commitment, and Economic Development
AbstractReal-world rent seeking has been a puzzle to political economists, as they cannot observe as much direct social cost as commonly believed. In this paper, we identify socially inefficient technology commitment as a device for rent seekers to improve their positions in a zero-dissipation contest. We show that the domestic industry may forgo innovation opportunities which would be optimal decisions without rent-seeking uncertainty. This analysis also explains some conspicuous features of the farm subsidy programs in the US. We conclude by discussing rent-seeking's dynamic implication: the retarding of economic development.
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Bibliographic InfoArticle provided by Mohr Siebeck, Tübingen in its journal Journal of Institutional and Theoretical Economics.
Volume (Year): 154 (1998)
Issue (Month): 4 (December)
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Postal: Mohr Siebeck GmbH & Co. KG, P.O.Box 2040, 72010 Tübingen, Germany
Find related papers by JEL classification:
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
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- Kabiraj, Tarun & Yang, Chun-Lei, 2001. "Licensing vs. Innovation incentives under uncertain government policies," International Review of Economics & Finance, Elsevier, vol. 10(3), pages 247-261, July.
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