Rent Seeking at the Margin? Theory and Evidence from Unesco’s World Heritage List

We analyze, both theoretically and empirically, how rent seekers allocate resources between alternative rents in the context of UNESCO’s World Heritage List (WHL). The stylized model features representatives of member countries who lobby UNESCO to include national sites in the WHL. Sites can be of either high or low quality, depending on whether their renown alone guarantees enlisting or lobbying is necessary. The increase in tourism generated by enlisting measures the value of the rent, which is greater for sites of lower quality. The cost of rent seeking corresponds to the financial resources spent and the loss of reputation that the representative suffers when he/she supports low quality sites. Given UNESCO’s institutional structure, this loss is higher when the representative acts in the World Heritage Committee, which gives him/her greater visibility. The model predicts that the representative promotes high quality sites when he/she sits in the committee, to increase his/her reputation, and lobbies for low quality sites when he/she is not a member, using the country’s financial resources. The estimates uncover a rich pattern of rent seeking strategies: member countries usually regularize their budgetary position before they propose lower quality sites and support high quality ones when they sit in the committee. This confirms that rent seeking is conducted at the margin.