Nonconventional costs of rent-seeking: X-inefficiency in the political process

There is relatively little controversy about the expenditures of time and money devoted to lobbying, campaign contributions, and so on that bias the political process. However, these traditional rent-seeking costs appear to be quite different from nonconventional costs of rent-seeking such as those associated with the lack of information about policies that distort the democratic process. It is likely that deviations from the ideal pattern of behavior arise not only in markets but also in the democratic process (as Tullock suggests) because voters are not properly informed. The problem of identifying waste due to lack of motivation and/or information is similar whether in the political arena or in market activities. In neither situation is X-efficiency observable. Ex post there will always be situations in which it is obvious that potential opportunities were foregone, but to the extent that such “wastes” either in markets or in the political process cannot be avoided, they have no importance for identification of inefficiency or for public policy. The conclusion is that X-efficiency theory contributes little to our understanding of rent-seeking actions by individuals and groups to obtain transfers of wealth through the political process. Copyright Kluwer Academic Publishers 1989