On Rent-Seeking Cost Under Democracy And Under Dictatorship
AbstractThis note argues that, broadly speaking, democracies have a comparative advantage over dictatorships in keeping rent-seeking costs down by imposing penalties that reduce returns to scale in rent-seeking. Dictatorships have a comparative advantage in restricting the number of rent-seekers through higher entry barriers into rent-seeking, although not to the point of eliminating rent-seeking altogether. Of the two, the former is potentially a more effective way to control rent-seeking costs. For this reason, a democracy has the potential to achieve lower rent-seeking losses, as a share of total rent available, than does a dictatorship, although this may require the democracy to achieve a high degree of transparency of government, along with freedom of the press, the judiciary, and public and private watchdog agencies to criticize politicians and public officials.
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Bibliographic InfoPaper provided by Carleton University, Department of Economics in its series Carleton Economic Papers with number 07-01.
Length: 31 pages
Date of creation: 15 Mar 2007
Date of revision: 01 May 2008
Publication status: Published: Carleton Economic Paper
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Find related papers by JEL classification:
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- H00 - Public Economics - - General - - - General
- H19 - Public Economics - - Structure and Scope of Government - - - Other
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-03-31 (All new papers)
- NEP-CDM-2007-03-31 (Collective Decision-Making)
- NEP-PBE-2007-03-31 (Public Economics)
- NEP-POL-2007-03-31 (Positive Political Economics)
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