David R. Henderson  

Rent Sucking

Counterstereotypical Fact of t... Macro Models and Forecasts...

Economists use the term "rent seeking" to refer to people investing resources in getting government favors. In the Concise Encyclopedia article I wrote on this, I explain why I think the term is inappropriate.

But if rent seeking were the appropriate term, then what Tyler Cowen quoted about Greece today could be called "rent sucking." Key quote:

AirSea's odyssey illustrates one of the key problems preventing Greece from generating the economic growth it needs to pay off its heavy debts: Critics say a sprawling civil service has tried to secure its own survival through an opaque patchwork of fees, taxes and red tape. The European Commission estimates the administrative burden of Greece's bureaucracy--the value of work devoted to dealing with government-imposed administration--is equivalent to 7% of gross domestic product, twice the EU average.

Comments and Sharing

COMMENTS (4 to date)
hacs writes:

In some places it is called "to create difficulties (bureaucracy) to sell (bribe) easiness".

EclectEcon writes:

This finding is consistent with the findings by Tim Harford and the World Bank, which showed a negative correlation between economic growth and development vs. gubmnt red tape.

boxcard writes:

Seems like payments made to gov't workers for administrative burden are just a fancy sort of welfare. Why not just bury money and get people to go dig it up? I suppose the difference is that these people are being paid to waste their own time AND the time of other people who are attempting to create real jobs.

Bill Drissel writes:

I think economists do themselves damage by continuing to use the phrase, "rent seeking." Talk about a term of art. Only an economist can connect the activity with the ordinary notion of rent - A pays B to use B's property as if it belonged to A.

Then too, "seeking" is more often "paying". How about "privilege buying?"

Bill Drissel
Grand Prairie, TX

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