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Rent Seeking Behavior in Transition Countries: The Case of Romania

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  • Ileana Tache
  • Dorin Lixandroiu

Abstract

This paper points out, in the changing institutional setting of transition in Romania, Some relevant factors influencing economic actors to behave in a way that pushes them to devote resources to unproductive goals, rather than to embark on activities that add economic and social value. The theoretical insights offered in the literature of rent seeking are applied to the issues of transition. A mathematical model of a rent seeking economy is presented, analyzing the influence of interest groups activity on the overall income of the economy. Some examples of rent seeking behavior that severely hamper the economic efficiency are illustrated for the case of Romania. The conclusion is that, in appreciating the progress in transition, the reduction in rent seeking is an important factor to be taken into consideration. Copyright IAES 2006

Suggested Citation

  • Ileana Tache & Dorin Lixandroiu, 2006. "Rent Seeking Behavior in Transition Countries: The Case of Romania," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 12(3), pages 395-407, August.
    • Handle: RePEc:kap:iaecre:v:12:y:2006:i:3:p:395-407:10.1007/s11294-006-9027-1
    DOI: 10.1007/s11294-006-9027-1
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    References listed on IDEAS

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    1. Earle, John S. & Telegdy, Almos, 2002. "Privatization Methods and Productivity Effects in Romanian Industrial Enterprises," Journal of Comparative Economics, Elsevier, vol. 30(4), pages 657-682, December.
    2. Annette N. Brown (ed.), 1999. "When Is Transition Over?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number wito, November.
    3. Murphy, Kevin M & Shleifer, Andrei & Vishny, Robert W, 1993. "Why Is Rent-Seeking So Costly to Growth?," American Economic Review, American Economic Association, vol. 83(2), pages 409-414, May.
    4. Dilek Demirbas, 1999. "Rent-Seeking in Developed and Developing Countries: Cross Section and Time Series Studies," Discussion Papers in Economics 99/2, Division of Economics, School of Business, University of Leicester.
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    More about this item

    Keywords

    057; 050; D23; L51; transition countries; rent seeking behavior; unproductive activities; clientelism;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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