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This topic sheds some light on why there are around the world such pervasive pressures for inefficiency, for failing to minimize costs.

The term rent-seeking was first introduced by a then young economist, Professor Ann Krueger. The phrase has become a part of the daily vocabulary of economics.

There has been long concern with rent-seeking across cultures. An example from Spanish literature would be Los Interes Creados (“The Special Interests”).

The Invisible Foot contrast with the “Invisible Hand”

Professor Krueger had a long-held concern about costs of rent-seeking. Three decades ago, she made an extremely useful contribution based on her work in U.S. and in Turkey. She integrated elements of international trade theory with the economic theory of bureaucracy and the systematic study of economic policy-making. The result was a seminal article called “The Political Economy of the Rent-Seeking Society.” It is assigned reading.

This contribution changed the way economists look at the workings of government, at influence-peddling, corruption and just ordinary bureaucratic ineffectiveness. It gave us a systematic way of studying issues related to corruption rather than relying on anecdotes.

Her framework, in the hands of later scholars, has enhanced our understanding of determinants of resource allocation and income distribution. We will see that rent-seeking behavior has implications that are rarely positive either for efficiency or equity, except by accident. Her framework deals with efforts by government officials, lobbyists, traders, and managers to secure favorable treatment from government officials. These favors result in “rents,” which go to the wealthiest, thereby worsening income distribution.

The theory shows how rent-seeking activities divert energies and resources from productive activities, thereby stunting economic growth and skewing the rewards from economic activity. Rent-seeking is thus a corrosive activity in any economy.

That is to say, successful rent-seeking activities have been one of the major factors accounting for maldistribution of income. This was long true, especially in Latin America.

The rent-seeking framework is also useful for analysis problems in the U.S., Canada and Europe. Is really useful for looking at 21 st century Russia, the “Kleptocratic society.”

Estimated losses for rent-seeking behavior in U.S. – 3% of GDP.

Effects of rent-seeking behavior are almost always very corrosive to economies and societies. When rent-seeking behavior interacts with structural problem of an economy, such as overdependence on oil revenue (Nigeria), the results can be spectacularly toxic.

In Turkey for example, there was an import-licensing system in seventies. Import licenses awarded to political favorites . It cost 15% of GNP.

To understand the consequences of rent-seeking behavior, you need to understand what is meant by the term “rent” in economics. We noted earlier that it has several meanings. Let us investigate. Distinguish always between “ natural rents” and artificial “ unnatural rents.”

Questions & Answers

Is there any normative that regulates the use of silver nanoparticles?
Damian Reply
what king of growth are you checking .?
What fields keep nano created devices from performing or assimulating ? Magnetic fields ? Are do they assimilate ?
Stoney Reply
why we need to study biomolecules, molecular biology in nanotechnology?
Adin Reply
yes I'm doing my masters in nanotechnology, we are being studying all these domains as well..
what school?
biomolecules are e building blocks of every organics and inorganic materials.
anyone know any internet site where one can find nanotechnology papers?
Damian Reply
sciencedirect big data base
Introduction about quantum dots in nanotechnology
Praveena Reply
what does nano mean?
Anassong Reply
nano basically means 10^(-9). nanometer is a unit to measure length.
do you think it's worthwhile in the long term to study the effects and possibilities of nanotechnology on viral treatment?
Damian Reply
absolutely yes
how to know photocatalytic properties of tio2 nanoparticles...what to do now
Akash Reply
it is a goid question and i want to know the answer as well
characteristics of micro business
for teaching engĺish at school how nano technology help us
Do somebody tell me a best nano engineering book for beginners?
s. Reply
there is no specific books for beginners but there is book called principle of nanotechnology
what is fullerene does it is used to make bukky balls
Devang Reply
are you nano engineer ?
fullerene is a bucky ball aka Carbon 60 molecule. It was name by the architect Fuller. He design the geodesic dome. it resembles a soccer ball.
what is the actual application of fullerenes nowadays?
That is a great question Damian. best way to answer that question is to Google it. there are hundreds of applications for buck minister fullerenes, from medical to aerospace. you can also find plenty of research papers that will give you great detail on the potential applications of fullerenes.
what is the Synthesis, properties,and applications of carbon nano chemistry
Abhijith Reply
Mostly, they use nano carbon for electronics and for materials to be strengthened.
is Bucky paper clear?
carbon nanotubes has various application in fuel cells membrane, current research on cancer drug,and in electronics MEMS and NEMS etc
so some one know about replacing silicon atom with phosphorous in semiconductors device?
s. Reply
Yeah, it is a pain to say the least. You basically have to heat the substarte up to around 1000 degrees celcius then pass phosphene gas over top of it, which is explosive and toxic by the way, under very low pressure.
Do you know which machine is used to that process?
how to fabricate graphene ink ?
for screen printed electrodes ?
What is lattice structure?
s. Reply
of graphene you mean?
or in general
in general
Graphene has a hexagonal structure
On having this app for quite a bit time, Haven't realised there's a chat room in it.
what is biological synthesis of nanoparticles
Sanket Reply
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Source:  OpenStax, Economic development for the 21st century. OpenStax CNX. Jun 05, 2015 Download for free at http://legacy.cnx.org/content/col11747/1.12
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