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How To Consider Governance In Economic Policy Modeling?

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  • Gaitan, Beatriz
  • Pavel, Ferdinand

Abstract

We develop a framework where economic agents choose between becoming productive entrepreneurs or re-distributive rent seekers. Rent seekers use economic resources to extract rents and thus their existence generates an inefficient economic outcome. We study the welfare impact of rent seeking activities and show that their reduction is welfare improving.

Suggested Citation

  • Gaitan, Beatriz & Pavel, Ferdinand, 2001. "How To Consider Governance In Economic Policy Modeling?," 2001 Annual meeting, August 5-8, Chicago, IL 20566, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea01:20566
    DOI: 10.22004/ag.econ.20566
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    References listed on IDEAS

    as
    1. Kollintzas, Tryphon & Angeletos, George-Marios, 2000. "Rent Seeking/Corruption And Growth: A Simple Model," CEPR Discussion Papers 2464, C.E.P.R. Discussion Papers.
    2. Baldwin, Richard E, 1992. "Measurable Dynamic Gains from Trade," Journal of Political Economy, University of Chicago Press, vol. 100(1), pages 162-174, February.
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