The pursuit of private gain through the use of resources that could have been used for more productive purposes.
Public Choice Theory: Public choice theory is an economic theory that focuses on the decisions made by individuals, groups, and organizations as they interact with the government or other public institutions.
Market Failures and Rent-Seeking: Market failures are situations where the market fails to allocate resources efficiently, while rent-seeking is the use of public resources or regulations for private gain. The two are closely related, as rent-seeking can exacerbate market failures.
Political Rent-Seeking: Political rent-seeking is the use of political power to extract resources from the government or other public institutions. This can take many forms, including lobbying, political campaign contributions, and the use of regulatory capture to gain an unfair advantage over competitors.
Regulatory Capture: Regulatory capture is a type of rent-seeking where a regulatory agency is captured by the industry it is supposed to regulate, resulting in regulations that favor the industry at the expense of consumers.
Interest Groups and Rent-Seeking: Interest groups are organizations that represent a particular set of interests in the political process, and rent-seeking is often used by interest groups to further their goals. This can lead to policy outcomes that benefit a narrow set of interests at the expense of the broader public.
Public Choice and Voting: Public choice theory also encompasses the study of voting, and how individuals make decisions in the political process. This includes topics like voter turnout, rational ignorance, and strategic voting.
The Tragedy of the Commons: The tragedy of the commons is a situation where individuals or groups overuse a shared resource, leading to its depletion. This is an example of a market failure that can be exacerbated by rent-seeking.
Privatization and Public Choice: The privatization of public goods and services is a hotly debated topic in public choice theory. Rent-seeking can play a major role in privatization, as private firms seek to gain control of previously public resources.
Game Theory and Public Choice: Game theory is a mathematical way of modeling strategic interactions between individuals or groups. Public choice theory often incorporates game theory approaches to better understand decision making in the political arena.
Behavioral Economics and Public Choice: Behavioral economics is a relatively new field that looks at how individuals make decisions and the various cognitive biases that can affect decision making. Many public choice theorists have incorporated behavioral economics findings into their work.
Lobbying: A type of rent-seeking where individuals, groups or businesses undertake activities to influence policymakers in a way that benefits them.
Regulatory Capture: A situation in which regulatory agencies become controlled or heavily influenced by the very industries or interests they are meant to regulate, allowing these industries or interests to shape regulation in their favor.
Subsidies: A type of rent-seeking where individuals or firms seek subsidies or financial support from the government to sustain their operations.
Tariffs: A type of rent-seeking where individuals or businesses lobby government officials to impose tariffs on imported goods to protect their domestic market share.
Protectionism: A type of rent-seeking where individuals or companies seek to protect their domestic industries by restricting trade, using non-tariff barriers, such as quotas or import licensing.
Rent extraction: A type of rent-seeking where individuals or groups use their market power or control over a critical resource to extract economic rent from others.
Monopoly: A type of rent-seeking where a firm, group or individual maintains a dominant position in a market, and they use this control to extract rents from other participants.
Intellectual Property: A type of rent-seeking where individuals or firms seek to control, monopolize or restrict access to a particular innovation or idea.