On the Cost of Rent-Seeking Under Democracy and Under Dictatorship
Using an extension of a standard rent-seeking model, this paper argues that ―inclusiveness,‖ as defined in the text, is the key property that a polity must have to keep down the costs of rent seeking. The potential for inclusiveness is also related to the nature of a political system, and it is argued that democracies are likely to be more inclusive than dictatorships, although the advantage of democracy is not automatic. Rent seeking can provide a greater benefit at a lower support cost to the government of a less inclusive polity than to one that is more inclusive.
|Keywords||Rent seeking, democracy, dictatorship.|
|JEL||Economic Models of Political Processes: Rent-Seeking, Elections, Legislatures, and Voting Behavior (jel D72), Public Economics: General (jel H00), Structure and Scope of Government: Other (jel H19)|
|Publisher||Department of Economics|
|Series||Carleton Economic Papers (CEP)|
Carson, Richard L. (2007). On the Cost of Rent-Seeking Under Democracy and Under Dictatorship (No. CEP 07-01). Carleton Economic Papers (CEP). Department of Economics.