Rent Seeking and Rent Extraction from the Perspective of Africa

2019 ◽  
pp. 223-254
Author(s):  
Charles K. Rowley
Keyword(s):  
Rent Seeking ◽  
Rent Extraction

The Political Economy of Rent Creation and Rent Extraction

2019 ◽  
pp. 532-549
Author(s):  
Roger D. Congleton
Keyword(s):  
Public Policy ◽  
Political Economy ◽  
Civil Law ◽  
Rent Seeking ◽  
Government Policies ◽  
The Political ◽  
Rent Extraction ◽  
Welfare Gains ◽  
The Creation ◽  
Gains And Losses

Rent Creation, Rent Extraction, and Rent Seeking are closely related concepts whose relationships are often misunderstood. For example, neither rent extraction nor rent seeking are possible until rents are created. Both rent extraction and rent seeking thus begin with the creation of rents. If one begins with the Hobbesian perspective on anarchy, all rents are ultimately the creation of government policies. Civil law determines what it means to own something, which includes an owner’s claims on the rents associated with his or her property and private activities. One in place, civil law also allows the possibility that rents can be created through private actions. Public policy may alter those claims through changes in use and rent-extraction rights associated with ownership. Such policies may create new rents or redistribute existing rents. In doing so, such policies induce rent-seeking efforts (or not) depending on the policies adopted and the manner in which rents are distributed. The welfare gains and losses associated with the various procedures for rent creation, rent seeking, and rent extraction imply that prohibitions against many, but not all, forms of rent extraction are warranted.

Lexicographic Voting: Holding Parties Accountable in the Presence of Downsian Competition

2015 ◽  
Vol 15 (4) ◽  
pp. 1867-1892 ◽  
Author(s):  
Jan Klingelhöfer
Keyword(s):  
Political Parties ◽  
Electoral Competition ◽  
Maximum Level ◽  
Rent Seeking ◽  
Rent Extraction ◽  
Policy Positions ◽  
Forward Looking

Abstract This paper combines ideas from models of electoral competition with forward-looking voters and models of electoral competition with backward-looking voters. Two political parties can commit in advance to policy platforms, but not to a maximum level of rent extraction. In the case without uncertainty, the electorate can limit rents to the same extent as in a purely backward-looking model of accountability, and the policy preferred by the voter who represents the median preferences of the electorate is implemented. In the case with uncertainty about the bliss point of the representative voter, the electorate has to accept higher rent seeking by the incumbent politician, but nonetheless retains some control over rent extraction. The policy positions of the two competing parties do not converge as they do in the case without uncertainty. I show in an example that this nonconvergence can increase the welfare of the representative voter.

scholarly journals Political Centralization and Government Accountability *

2015 ◽  
Vol 131 (1) ◽  
pp. 381-422 ◽  
Author(s):  
Federico Boffa ◽  
Amedeo Piolatto ◽  
Giacomo A. M. Ponzetto
Keyword(s):  
Convex Function ◽  
Rent Seeking ◽  
Political Agency ◽  
Economies Of Scope ◽  
Federal System ◽  
Government Accountability ◽  
Rent Extraction ◽  
Taste Heterogeneity ◽  
Voter Information ◽  
Information Heterogeneity

Abstract This article explains why decentralization can undermine accountability and answers three questions: what determines if power should be centralized or decentralized when regions are heterogeneous? How many levels of government should there be? How should state borders be drawn? We develop a model of political agency in which voters differ in their ability to monitor rent-seeking politicians. We find that rent extraction is a decreasing and convex function of the share of informed voters, because voter information improves monitoring but also reduces the appeal of holding office. As a result, information heterogeneity pushes toward centralization to reduce rent extraction. Taste heterogeneity pulls instead toward decentralization to match local preferences. Our model thus implies that optimal borders should cluster by tastes but ensure diversity of information. We also find economies of scope in accountability that explain why multiplying government tiers harms efficiency. A single government in charge of many policies has better incentives than many special-purpose governments splitting its budget and responsibilities. Hence, a federal system is desirable only if information varies enough across regions.

scholarly journals Asymmetric yardstick competition: traditional procurement versus public-private partnerships

2021 ◽  
Author(s):  
Giuseppe Di Liddo ◽  
Annalisa Vinella
Keyword(s):  
Rent Seeking ◽  
The Other ◽  
Yardstick Competition ◽  
Rent Extraction ◽  
Private Partnership ◽  
Competition Mechanism ◽  
Contractual Arrangements ◽  
Project Governance ◽  
Different Levels ◽  
Over Time

AbstractWe consider local jurisdictions where rent-seeking administrators undertake identical infrastructure projects, choosing between two contractual arrangements: traditional procurement (TP) and public-private partnership (PPP). A yardstick competition mechanism is triggered through retrospective voters’ electoral decisions. A regime with TP in one jurisdiction and PPP in the other is likely to arise when projects are mildly lucrative and/or jurisdictions have moderate fiscal capacity. In this equilibrium, incumbents provide different levels of public services, face different re-election probabilities, and obtain different rents. By differentiating the project governance, incumbents specialize in rent extraction over time, thus hindering yardstick competition although jurisdictions are otherwise identical.

scholarly journals Rent-seeking Practices in the Housing Development Approval Process

2021 ◽  
Vol 39 (2) ◽  
pp. 25-49
Author(s):  
Abdul-Rashid Abdul-Aziz ◽  
Suhaila Ali
Keyword(s):  
House Prices ◽  
Rent Seeking ◽  
Planning System ◽  
Approval Process ◽  
Rent Extraction ◽  
Complex Development ◽  
Market State ◽  
Public Actor ◽  
State Actors ◽  
Rich Data

The lengthy, uncertain and onerous planning approval process in various countries around the world has prompted frustrated housing developers to seek influence by paying off approving officials. A research was conducted in Malaysia to investigate in greater detail this rent-seeking phenomenon by asking six fundamental questions. Rich data were obtained by interviewing 22 housing developers and consultants who work for them. Developers engage in rent-seeking behaviours to overcome genuine and artificial hurdles when applying for development approval. All approving agencies, though not all their staff, reciprocate to such behaviours. The monetary value of the payoffs depend on the rank of the public actor and project features. The higher the office holder is, the larger is the expected pay-off. Big and complex development projects in urban centres have a higher pay-off tag. Low value items television sets and car repairs serve to support normal lifestyle whereas high value items such as golfing and holiday trips support lavish lifestyle. Establishing good rapport is a prerequisite to the rent seeking and giving exchange. Elements which help foster reciprocity by state actors to housing developers’ rentseeking behaviours include low civil servant salary and high living cost, and weak punitive action. Common ethnicity facilitates nuanced communication by the latter, but common religion may dampen the former’s enthusiasm to accept any payoffs. Eventually house buyers and the general public are the casualties by virtue of higher house prices and substandard infrastructure. Given the combination of inherent features of the planning system and certain elements that impinge on state actors both of which promote rent-seeking practices, a realistic law enforcement solution is to prioritise illicit market-state exchanges involving grossly distorting rent extraction and pecuniary rewards of significant magnitude rather than total eradication of the practice.

Peran Pengawasan Internal Dalam Menghindari Kutukan Sumber Daya Alam

Liquidity ◽  
2016 ◽  
Vol 5 (1) ◽  
pp. 1-9
Author(s):  
Andilo Tohom
Keyword(s):  
Natural Resources ◽  
Internal Audit ◽  
Rent Seeking ◽  
Rich Country ◽  
Literature Study ◽  
Indonesian Government ◽  
The World ◽  
Policies And Programs ◽  
The Right

Indonesia is one of many countries in the world so called resource-rich country. Natural resources abundance needs to be managed in the right way in order to avoid dutch diseases and resources curses. These two phenomena generally happened in the country, which has abundant natural resources. Learned from Norwegian experiences, Indonesian Government need to focus its policy to prevent rent seeking activities. The literature study presented in this paper is aimed to provide important insight for government entities in focusing their policies and programs to avoid resources curse. From the internal audit perspective, this study is expected to improve internal audit’s role in assurance and consulting.

Institutional Theory of Endless Redistribution

2005 ◽  
pp. 4-18 ◽  
Author(s):  
K. Sonin
Keyword(s):  
Property Rights ◽  
Institutional Theory ◽  
Growth Rates ◽  
Rent Seeking ◽  
Economic Institutions ◽  
Wide Spread ◽  
Grass Roots ◽  
Protection Systems ◽  
Private Protection ◽  
The Rich

In unequal societies, the rich may benefit from shaping economic institutions in their favor. This paper analyzes the dynamics of institutional subversion by focusing on public protection of property rights. If this institution functions imperfectly, agents have incentives to invest in private protection of property rights. The ability to maintain private protection systems makes the rich natural opponents of public protection of property rights and precludes grass-roots demand to drive the development of the market-friendly institution. The economy becomes stuck in a bad equilibrium with low growth rates, high inequality of income, and wide-spread rent-seeking. The Russian oligarchs of the 1990s, who controlled large stakes of newly privatized property, provide motivation for this paper.

On the Origins of Administrative Rent: Doing Business in a Russian Region N

2010 ◽  
pp. 58-80 ◽  
Author(s):  
A. Oleinik
Keyword(s):  
Rent Seeking ◽  
Individual Decision ◽  
Resource Rent ◽  
Competitive Edge ◽  
Doing Business ◽  
Russian Region ◽  
Positive Gain ◽  
Access To The Field ◽  
Quantitative And Qualitative Methods

In the article two types of rent are differentiated: resource rent and administrative rent. The latter is linked to restrictions on the access to the field of interactions. The contribution of the theory of public choice and the theory of rent-seeking and directly-unproductive activities is further developed by shifting the emphasis from individual decision-making to interactions between three actors: C, who controls access to the field, A, who gets a competitive edge as a result, and B, who assumes a subjacent position with regard to both A and C, yet still receives a positive gain from transacting. Domination by virtue of a constellation of As, Bs, and Cs interests is illustrated with the help of an in-depth case study of a Russian region. This study combines quantitative and qualitative methods, as well as their triangulation.

Multi-component complex ores: Special aspects of using ad valorem and specific mineral extraction tax rates

2020 ◽  
Vol 26 (6) ◽  
pp. 1297-1314
Author(s):  
T.A. Loginova
Keyword(s):  
Krasnoyarsk Krai ◽  
Tax Rates ◽  
Russian Regions ◽  
Rent Extraction ◽  
Effective Tax Rate ◽  
Mineral Extraction ◽  
Tax Rate ◽  
Significant Differentiation ◽  
The Russian Federation ◽  
Ad Valorem

Subject. This article discusses the issues related to the taxation for multi-component complex ores and commercial components using ad valorem and specific mineral extraction tax (MET) rates. Objectives. The article aims to assess some results of the application of specific MET rates in the Krasnoyarsk Krai and ad valorem rates in other subjects of the Russian Federation, taking into account the specifics of the current taxation procedure for multi-component complex ores and their commercial components. Methods. For the study, I used a comparative analysis, synthesis, and the method of extrapolation. Results. The article shows that the change in the type of MET rate for multi-component complex ores and commercial components has led to a significant increase in the effective tax rate. This led to an increase in the corresponding MET revenues in the Krasnoyarsk Krai. The article also substantiates that the introduction of specific rates in other Russian regions requires a significant differentiation of specific MET rates. However, this is risk-bearing concerning unfair distribution of the tax burden and the complexity of tax administration. Conclusions. The issue of identifying multi-component complex ores and their commercial components is controversial. Extending specific MET rates to other regions may complicate the mechanism of rent extraction.

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