Abstract
The notions of rent and rent-seeking have a substantial contribution to make in offering a theoretical and analytical framework for understanding events and behavior in the transition. The theory of rent-seeking behavior reveals how economic incentives combined with political discretion and unclear property rights attract individuals’ attention to unproductive activities directed at contesting available rents. This paper provides a review of rent-seeking theory with a directed focus on the role of rents and rent-seeking incentives in the transition. We indicate how rents and rent-seeking can be endemic to an economy in transition, and how recognition of rent-seeking incentives enhances understanding of the reasons why the transition to market economy is an extended process..
Respectively, Director, World Development Report 1996, The World Bank; William Gittes Professor of International Economics, Bar-Ilan University; Professor of Economics, University of Konstanz. This research was sponsored by the World Bank. The views and conclusions contained in this report however reflect the individual viewpoints of the authors and indicate the official position of neither the World Bank nor of any of its affiliated bodies. The research of Arye Hillman and Heinrich Ursprung was assisted by the Max Manok Prize for Economic Research.
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Gelb, A., Hillman, A.L., Ursprung, H.W. (1998). Rents as Distractions: Why the Exit from Transition is Prolonged. In: Baltas, N.C., Demopoulos, G., Hassid, J. (eds) Economic Interdependence and Cooperation in Europe. Studies in International Economics and Institutions. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-72111-3_3
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