VISIT WEBSITE >>>>> http://gg.gg/y83ws?536402 <<<<<<
Create a personalised content profile. Measure ad performance. Select basic ads. Create a personalised ads profile. Select personalised ads. Apply market research to generate audience insights. Measure content performance. Develop and improve products. List of Partners vendors. Rent seeking or rent-seeking is an economic concept that occurs when an entity seeks to gain added wealth without any reciprocal contribution of productivity. Typically, it revolves around government-funded social services and social service programs.
The concept of rent seeking was established in by Gordon Tullock and later popularized by Anne Krueger in Smith's studies suggested that entities earn income from wages, profit, and rent. To create profit usually requires the risk of capital with the goal of gaining a return. Earning wages comes from employment. However, of the three income sources, rent is the easiest to obtain and can require little risk.
Economic rent is the income earned from the utilization of resource ownership. Entities that own resources can lend them to earn interest rents, lease them to earn rental income, or they may utilize their resources in other income-producing ways.
In general, the term economic rent has evolved to mean receiving a payment that exceeds the costs involved in the associated resource. Entities, therefore, will take rent seeking steps to obtain economic rent that requires no reciprocal contribution of production. Oftentimes, this can mean using a particular status to gain economic rent from the government through social service grants. Rent seeking is a byproduct of political legislation and government funding. Politicians decide the laws, regulations, and funding allocations that govern industries and government subsidy distributions.
These legislations and actions manifest rent seeking behaviors by offering economic rent with little or no reciprocity. Governments have established funding for a variety of social service programs. Business social service programs are typically designed to provide aid for businesses with the goal of fostering economic prosperity.
Individual social service funding is provided for the goals of wellness and human welfare. Businesses can lobby the government for help in the areas of competition, special subsidies, grants , and tariff protection.
If a business succeeds in getting laws passed to limit their competition or create barriers to entry for others, it can achieve economic rents without any added productivity or capital at risk. Individual rent seekers are also able to achieve economic rents when obtaining social service funding. Funds are offered through welfare programs, housing assistance, and Medicaid.
Individual rent seekers can use their eligibility status for these programs to obtain funds from the government without any reciprocal contribution. Lobbying for the lessening of occupational licensing requirements is another very specific example of rent seeking.
Doctors, dentists, airline pilots, and many other fields require licensing to practice. However, in many U. Often, regulations exist due to past lobbying efforts from existing industry members. If certification and license obligations prevent newcomers from competing, fewer professionals may share the revenue.
Thus, a more significant portion of money accrues to each existing member without additional economic benefit. Also, since limits to competition can be a driver for prices, consumers may be required to pay more.
The idea is simple but powerful. People are said to seek rents when they try to obtain benefits for themselves through the political arena. They typically do so by getting a subsidy for a good they produce or for being in a particular class of people, by getting a tariff on a good they produce, or by getting a special regulation that hampers their competitors.
Elderly people, for example, often seek higher Social Security payments; steel producers often seek restrictions on imports of steel; and licensed electricians and doctors often lobby to keep regulations in place that restrict competition from unlicensed electricians or doctors.
Unfortunately, there is no good reason. It means the payment to a factor of production in excess of what is required to keep that factor in its present use. What is wrong with rent seeking? Absolutely nothing. I would be rent seeking if I asked for a raise. My employer would then be free to decide if my services are worth it. It has been known for centuries that people lobby the government for privileges. If, for example, a steel firm spends one million dollars lobbying and advertising for restrictions on steel imports, whatever money it gains by succeeding, presumably more than one million, is not a net gain.
From this gain must be subtracted the one-million-dollar cost of seeking the restrictions.
Comments