Rent-Seeking
AdvancedRent-seeking is the pursuit of income or wealth by manipulating the political, legal or economic environment, such as by lobbying for favourable regulations, subsidies or protection, rather than by creating new value.
Businesses and individuals normally earn income by producing goods and services people want. Rent-seeking instead tries to capture a larger share of existing wealth, often at others' expense.
Examples include lobbying for tariffs that protect an industry from foreign competition, seeking exclusive licences or monopoly rights, pushing for regulations that create barriers for new competitors, and obtaining subsidies or tax breaks that benefit a narrow group.
For example, an industry might lobby for strict licensing rules that make it costly for new firms to enter, allowing existing firms to charge higher prices.
Economists consider rent-seeking wasteful, because resources are spent on securing advantages rather than on productive activity, and because the resulting policies often reduce competition and efficiency. The concept was developed by economists including Gordon Tullock and Anne Krueger. Distinguishing legitimate advocacy from rent-seeking can be difficult in practice.
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