On Rent-Seeking Cost Under Democracy And Under Dictatorship

Richard Carson ()
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Richard Carson: Department of Economics, Carleton University, http://http-server.carleton.ca/~rcarson

No 07-01, Carleton Economic Papers from Carleton University, Department of Economics

Abstract: This note argues that, broadly speaking, democracies have a comparative advantage over dictatorships in keeping rent-seeking costs down by imposing penalties that reduce returns to scale in rent-seeking. Dictatorships have a comparative advantage in restricting the number of rent-seekers through higher entry barriers into rent-seeking, although not to the point of eliminating rent-seeking altogether. Of the two, the former is potentially a more effective way to control rent-seeking costs. For this reason, a democracy has the potential to achieve lower rent-seeking losses, as a share of total rent available, than does a dictatorship, although this may require the democracy to achieve a high degree of transparency of government, along with freedom of the press, the judiciary, and public and private watchdog agencies to criticize politicians and public officials.

Keywords: Rent seeking; democracy; dictatorship (search for similar items in EconPapers)
JEL-codes: D72 H00 H19 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2007-03-15, Revised 2008-05-01
New Economics Papers: this item is included in nep-cdm, nep-pbe and nep-pol
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Published: Carleton Economic Papers

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