‘Rent seeking’ refers to the investment of resources in efforts to create monopolies. Such investments impose a social cost (which may outweigh the benefit to the monopolist) because they are unproductive. That cost is greater than the mere cost of lobbying by special interests for privilege when the privilege is conferred in a way that is economically inefficient but politically feasible (which is often true of regulations). Research on rent seeking has demonstrated that the true social costs of promoting special interests thus greatly exceed the deadweight costs of the distortions introduced into the economy.
KeywordsConsumer surplus Corruption Deadweight loss Krueger, A. O. Lobbying Monopoly Morgan, J. P. Political influence Pseudo-equilibrium Rent Rent seeking Social cost Special interests Tullock, G.
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