rent-seeking

• rent seeking

rent (“a profit from possession of a valuable right”) +‎ seeking.

• (Received Pronunciation, General American) IPA^(key): /ɹɛnt siːkɪŋ/

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• Hyphenation: rent-seek‧ing

rent-seeking (uncountable)

1. (economics) The attempt to profit by manipulating the economic or political environment, for example, by seeking governmental action that restricts entry into a market.
   • 1974 June, Anne O[sborn] Krueger, “The Political Economy of the Rent-seeking Society”, in The American Economic Review, volume 64, page 291; reprinted in Roger D[ouglas] Congleton, Arye L. Hillman, and Kai A. Konrad, editors, 40 Years of Research on Rent Seeking 2: Applications: Rent Seeking in Practice, Berlin; Heidelberg: Springer-Verlag, 2008, →ISBN, page 151:

     In many market-oriented economies, government restrictions upon economic activity are pervasive facts of life. These restrictions give rise to rents of a variety of forms, and people often compete for the rents. Sometimes, such competition is perfectly legal. In other instances, rent seeking takes other forms, such as bribery, corruption, smuggling, and black markets.

   • 1990 July, Mukesh Eswaran, Ashok Kotwal, Demand Externality as an Impediment to Productivity Growth in LDC's (Discussion Papers of the Department of Economics (University of British Columbia); no. 90-23), Vancouver, B.C.: University of British Columbia, →OCLC, pages 4–5:

     It is almost certain that ‘rent-seeking’ would be a significant factor in a capitalist economy where the government encourages cartelization or confers ‘a leading sector’ role on any sector.

   • 2001, James M[cGill] Buchanan, Choice, Contract, and Constitutions (The Collected Works of James M. Buchanan; 16), Indianapolis, Ind.: Liberty Fund, →ISBN, pages 258–259:

     People find it privately rational to invest resources in efforts to secure differentially favored access to the economic power inherent in bureaucratic discretion. This rent seeking on the part of those who compete for the scarce access to valued goods ... represents wasteful investment on the part of all people who are unsuccessful in the competitive effort.

   • 2003 April, “Trade-offs among Policy Options”, in The Economics of Climate Change: A Primer (A CBO Study), [Washington, D.C.]: Congressional Budget Office, United States Congress, →ISBN, pages 38–39:

     One importance consequence of that fact is that efforts to restrict emissions may encourage the affected parties to seek regulatory provisions that provide them with tax exemptions or access to permits—that is, they may engage in rent-seeking behavior. For example, fossil fuel suppliers might advocate a system in which they were given emissions permits free of charge—so that they would receive the entire scarcity rent resulting from the emissions limits.

   • 2006, Walter J. Wessels, “Public Choice and Externalities”, in Economics (Business Review Books), 4th edition, Hauppauge, N.Y.: Barron's, →ISBN, page 542:

     Legislation can result in rents (and profits) to special-interest groups. However, rent seeking by seeking favorable legislation can be costly (e.g., in contributions to campaigns).

2. The effort to increase one's share of wealth without doing something productive or adding value.
   • 2007, Pius Fischer, Rent-Seeking, Institutions and Reforms in Africa:

     Ultimately, at the very end of the spectrum rent-seeking takes place in private social life, even though a delimitation critically depends on the society's 'subjective' definition of property rights and duties. It makes sense to define people begging on the street and knocking on doors as rent-seekers, in particular if they have opportunities to work.

   • 2013, Gordon Tullock, “Efficient Rent Seeking”, in Alan Lockard, Gordon Tullock, editors, Efficient Rent-Seeking: Chronicle of an Intellectual Quagmire, page 5:

     Let us assume, then, that a wealthy eccentric has put up $100 as a prize for the special lottery between A and B. Note that the amount spent on lottery tickets is retained by the lottery, not added onto the prize. This makes the game equivalent to rent seeking, where resources are also wasted.

   • 2020, Kurt von Seekamm Jr., Rent Seeking and Human Capital:

     Rent seeking, therefore, is rational for the individual as it increases individual accumulation (individual income and firm profits increase). From a societal perspective, rent seeking is irrational as resources are wasted by being diverted away from social accumulation for the sake of individual accumulation.

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