Rent-seeking government and endogenous takeoff in a Schumpeterian economy

Angus Chu, Yuichi Furukawa and Xilin Wang

Journal of Macroeconomics, 2022, vol. 72, issue C

Abstract: This study explores how the rent-seeking behavior of the government may impede economic development and delay industrialization. Introducing a rent-seeking government to a Schumpeterian growth model that features endogenous takeoff, we find that a more self-interested government engages in more rent-seeking taxation, which delays the economy’s transition from pre-industrial stagnation to modern economic growth. Quantitatively, a completely self-interested government could have delayed industrialization, relative to a benevolent government, by about two centuries in the UK.

Keywords: Rent-seeking government; Endogenous takeoff; Industrialization (search for similar items in EconPapers)
JEL-codes: H20 O30 O40 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Working Paper: Rent-Seeking Government and Endogenous Takeoff in a Schumpeterian Economy (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jmacro:v:72:y:2022:i:c:s0164070422000039

DOI: 10.1016/j.jmacro.2022.103399

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