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Rent-seeking for budgetary allocation: Preliminary results for 20 countries

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  • Eliakim Katz
  • Jacob Rosenberg

Abstract

In this paper we present quantitative measures of the ‘proneness’ of different countries to respond to pressure groups in determining the composition of their spending. These, in turn, help us to derive simple measures of the rent-seeking done in relation to the government's spending pie. Despite the fact that these measures are indicative rather than conclusive they do provide some means of comparing the extent of this rent-seeking waste (or at least its rank distribution) across countries. Also, with the appropriate provios the measures may be used as first approximations for the actual waste generated by rent-seeking activities for government spending. Such measures may be of considerable importance when the question of the optimality of government intervention in a given country is considered. Alternatively, it may be of use when an aid package to a given country from an international agency or a major economy is being considered. At least the rank of a given economy in Tables 1 and 2 can profitably be taken as an additional decision parameter in such cases. But over and above the specific results and methodology used herein we consider the contribution of this paper to be in hopefully stirring interest in the important but much neglected issue of macroeconomic rent-seeking. We feel that this paper has shown that the problem of estimating rent-seeking at the macro level can be attempted. Of course, we expect that our approach will eventually be superseded by further work in the area. Nonetheless, this paper will have achieved its main aim if it stimulates further developments in this hereto barren field. Copyright Kluwer Academic Publishers 1989

Suggested Citation

  • Eliakim Katz & Jacob Rosenberg, 1989. "Rent-seeking for budgetary allocation: Preliminary results for 20 countries," Public Choice, Springer, vol. 60(2), pages 133-144, February.
    • Handle: RePEc:kap:pubcho:v:60:y:1989:i:2:p:133-144
    DOI: 10.1007/BF00149241
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    References listed on IDEAS

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    1. Mahmudul Anam & Eliakim Katz, 1988. "Rent-seeking and second best economics," Public Choice, Springer, vol. 59(3), pages 215-224, December.
    2. Eliakim Katz & J. Smith, 1988. "Rent-seeking and optimal regulation in replenishable resource industries," Public Choice, Springer, vol. 59(1), pages 25-36, October.
    3. Krueger, Anne O, 1974. "The Political Economy of the Rent-Seeking Society," American Economic Review, American Economic Association, vol. 64(3), pages 291-303, June.
    4. Richard A. Posner, 1975. "The Social Costs of Monopoly and Regulation," Springer Books, in: Roger D. Congleton & Kai A. Konrad & Arye L. Hillman (ed.), 40 Years of Research on Rent Seeking 2, pages 45-65, Springer.
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    Cited by:

    1. Levy, Daniel & Snir, Avichai, 2022. "Potterian Economics," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 1, pages 1-32.
    2. Kirchgassner, Gebhard, 2005. "(Why) are economists different?," European Journal of Political Economy, Elsevier, vol. 21(3), pages 543-562, September.
    3. Kahana, Nava & Klunover, Doron, 2014. "Rent seeking and the excess burden of taxation," European Journal of Political Economy, Elsevier, vol. 35(C), pages 158-167.
    4. Kenneth Mackenzie, 1999. "Diseño institucional y política pública: una perspectiva microeconómica," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 1(1), pages 17-58, July-dece.
    5. Gael Lagadec, 2014. "Are political support-driven policies always bad? The case of large interest groups," European Journal of Government and Economics, Europa Grande, vol. 3(2), pages 138-147, December.
    6. Kahana, Nava & Klunover, Doron, 2014. "Rent Seeking and the Excess Burden of Taxation," IZA Discussion Papers 8160, Institute of Labor Economics (IZA).
    7. Arye L. Hillman & Heinrich W. Ursprung, 2016. "Where are the rent seekers?," Constitutional Political Economy, Springer, vol. 27(2), pages 124-141, June.
    8. Nitzan, Shmuel, 1991. "Collective Rent Dissipation," Economic Journal, Royal Economic Society, vol. 101(409), pages 1522-1534, November.
    9. Warneryd, Karl, 2003. "Information in conflicts," Journal of Economic Theory, Elsevier, vol. 110(1), pages 121-136, May.
    10. Gebhard Kirchgässner, 2008. "Direct democracy: obstacle to reform?," Constitutional Political Economy, Springer, vol. 19(2), pages 81-93, June.
    11. Bedasso, Biniam, 2012. "Lords of Uhuru: the political economy of elite competition and institutional change in post-independence Kenya," MERIT Working Papers 2012-042, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    12. repec:elg:eechap:15325_13 is not listed on IDEAS
    13. repec:elg:eechap:15325_2 is not listed on IDEAS
    14. Hessami, Zohal, 2014. "Political corruption, public procurement, and budget composition: Theory and evidence from OECD countries," European Journal of Political Economy, Elsevier, vol. 34(C), pages 372-389.
    15. Min Jeong Park, 2007. "Rent Seeking in Korean Government Budget Allocation," International Review of Public Administration, Taylor & Francis Journals, vol. 12(2), pages 33-44, January.
    16. Tariq Hussain & Khizra Rana, 2022. "Rent Seeking Policy, Institutions and Corruption in Specific Countries of the World," Journal of Policy Research (JPR), Research Foundation for Humanity (RFH), vol. 8(4), pages 283-291, December.
    17. Czyżewski, Bazyli, 2016. "Political Rents of European Farmers in the Sustainable Development Paradigm. International, national and regional perspective," MPRA Paper 74253, University Library of Munich, Germany.
    18. Levin, Mark (Левин, Марк) & Shilova, Nadezhda V. (Шилова, Надежда), 2016. "Rentseeking Behavior in Systems with a Complex Structure [Рентоориентированное Поведение В Системах Со Сложной Структурой]," Working Papers 2272, Russian Presidential Academy of National Economy and Public Administration.

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