Table of Contents

Companion to the Political Economy of Rent Seeking

Companion to the Political Economy of Rent Seeking

Edited by Roger D. Congleton and Arye L. Hillman

The quest for benefit from existing wealth or by seeking privileged benefit through influence over policy is known as rent seeking. Much rent seeking activity involves government and political decisions and is therefore in the domain of political economy, although it can also take place in personal relations and within firms and bureaucracies. Rent seeking, which involves the unproductive use of resources, is however primarily associated with policies that create rents as well as rent extraction or political benefit for the creators of rents. The contributions in this outstanding volume provide an accompaniment or “companion” to the literature on rent seeking and the related political economy of rent creation and extraction. The chapters, written by leading scholars in the field, demonstrate the centrality of rent-related incentives to the study of economics, politics, culture, public administration and history.

Chapter 11: Regulatory rent seeking

William F. Shughart II and Diana W. Thomas

Subjects: economics and finance, political economy, public choice theory, politics and public policy, political economy, public choice


This chapter views the theory of rent seeking in the context of governmental regulation of prices and conditions of market entry. Such policies create economic rents for the regulated firms and put in place incentives for rent seeking through use of real resources to contest and gain access to the rents. Evidence from the history of economic regulation and deregulation in the United States is marshaled to show that regulatory intervention does not add to society’s wealth, but, consistent with the logic of collective action, instead redistributes existing wealth from unorganized, politically weak groups (‘the many’) to well-organized, politically effective groups (‘the few’).

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