Where are the rent seekers?

Arye L. Hillman, Heinrich W. Ursprung

    Research output: Contribution to journalArticlepeer-review

    21 Scopus citations

    Abstract

    In a remarkably simple and yet one of the most original and insightful observations of 20th century economics, Gordon Tullock pointed out that there are efficiency losses when public policies and political behavior create contestable rents. Tullock also observed that social losses from contesting rents appeared smaller than might be expected, so raising the question ‘where are the rent seekers?’ Tullock proposed that political accountability and ‘free-riding’ incentives in interest groups limit social losses from rent seeking. We affirm Tullock’s explanations, which apply differently under different political institutions. We compare Tullock with Gary Becker, who focused on deadweight losses from redistribution and concluded, in contrast to Tullock, that political redistribution is efficient. The comparison with Becker highlights the significance of the recognition of Tullock’s concept of rent seeking. By excluding rent-seeking losses from the social costs of redistribution, Becker could arrive at a conclusion more favorable than Tullock to an ideology that sees merit in extensive redistribution. Tullock’s model, although more encompassing of actual social costs of redistribution, would have been less welcome in the social democratic welfare state.

    Original languageEnglish
    Pages (from-to)124-141
    Number of pages18
    JournalConstitutional Political Economy
    Volume27
    Issue number2
    DOIs
    StatePublished - 1 Apr 2016

    Bibliographical note

    Publisher Copyright:
    © 2016, Springer Science+Business Media New York.

    Keywords

    • Contest models
    • Gary Becker
    • Gordon Tullock
    • Income distribution
    • Interest groups
    • Rent creation
    • Rent seeking

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