EFFECTS OF RENT-SEEKING ON ECONOMIC GROWTH IN LOW-INCOME ECONOMIES

Zi Wen Vivien Wong (), Fanyu Chen () and Thian Hee Yiew ()
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Zi Wen Vivien Wong: Universiti Tunku Abdul Rahmana
Fanyu Chen: Universiti Tunku Abdul Rahmana
Thian Hee Yiew: Universiti Tunku Abdul Rahmana

Bulletin of Monetary Economics and Banking, 2021, vol. 24, issue 2, 205-220

Abstract: Sluggish growth in low-income countries, despite the high performance in other economic indicators, motivates the literature to switch attention to institutions. Despite its crucial economic implications, there is limited attention on rent-seeking as a driver of economic growth in low-income countries. This paper investigates the effect of rent-seeking on growth in low-income countries from 2004 to 2017using the system generalized method of moments estimator. The empirical results reveal that rent-seeking negatively affects growth, implying that it obstructs the pace of economic development in low-income countries. Hence, it is necessary for policymakers in these countries to adopt anti-rent-seeking policies to promote a rapid and sustainable growth.

Keywords: Rent-seeking; Economic growth; System generalized method of moments estimator; Low-income countries (search for similar items in EconPapers)
JEL-codes: E02 H63 O43 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:idn:journl:v:24:y:2021:i:2c:p:205-220

DOI: 10.21098/bemp.v24i2.1386

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