The Welfare Effects of Rent-Saving and Rent-Seeking

Shannon Mitchell

Canadian Journal of Economics, 1993, vol. 26, issue 3, 660-69

Abstract: This paper uses an overlapping-generations framework to model the allocation of import licences of intermediate goods according to firm capacity. It shows that this method of allocation encourages rent-seeking and also thereby improves welfare compared with a method that does not allow rent-seeking. A. O. Kreuger (1975, 1974) and J. N. Bhagwati and P. Desai (1970) describe how Turkey and India have allocated imports on the basis of firm capacity, which led to rent-seeking through overexpansion of capacity. J. N. Bhagwati and T. N. Srinivasan (1980) first recognized the possibility that rent-seeking may actually improve welfare in the presence of a distortion, as it does in this paper.

Date: 1993
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://links.jstor.org/sici?sici=0008-4085%2819930 ... WEORA%3E2.0.CO%3B2-V (text/html)
only available to JSTOR subscribers

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:cje:issued:v:26:y:1993:i:3:p:660-69

Ordering information: This journal article can be ordered from
https://www.economic ... ionen/membership.php

Access Statistics for this article

Canadian Journal of Economics is currently edited by Zhiqi Chen

More articles in Canadian Journal of Economics from Canadian Economics Association Canadian Economics Association Prof. Werrner Antweiler, Treasurer UBC Sauder School of Business 2053 Main Mall Vancouver, BC, V6T 1Z2. Contact information at EDIRC.
Bibliographic data for series maintained by Prof. Werner Antweiler ().