The impact of rent seeking on social infrastructure and productivity

Fernando del Río

Review of Development Economics, 2021, vol. 25, issue 3, 1741-1760

Abstract: I develop a neoclassical growth model in which rent seeking impacts negatively on productivity and welfare because it discourages the accumulation of social infrastructure. I estimate the fraction of resources wasted in rent seeking for a sample of 141 countries. On average, countries in the first (respectively, last) decile of the distribution of the estimated rent‐seeking intensity devote around 25% (respectively, 38%) of output to rent‐seeking and have 88% (respectively, 80%) of output per capita and 58% (respectively, 38%) of consumption per capita of a country without rent seeking. Moreover, around one quarter of the drop in consumption per capita caused by rent seeking is due to its negative impact on the accumulation of social infrastructure and the remaining three quarters are due to the waste of resources.

Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/rode.12772

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:rdevec:v:25:y:2021:i:3:p:1741-1760

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1363-6669

Access Statistics for this article

Review of Development Economics is currently edited by E. Kwan Choi

More articles in Review of Development Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().