Family Control and the Rent–Seeking Society

Randall Morck and Bernard Yeung

Entrepreneurship Theory and Practice, 2004, vol. 28, issue 4, 391-409

Abstract: A high level of trust within a small elite, like a low level of trust in society at large, may be a serious impediment to economic development. This is because such concentrated high trust among the elite promotes political rent seeking, known to retard growth. We propose that entrusting the governance of a country's great corporations to a few wealthy families promotes this undesirable distribution of trust. Preliminary empirical evidence and arguments grounded in game theory support this view.

Date: 2004
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Persistent link: https://EconPapers.repec.org/RePEc:sae:entthe:v:28:y:2004:i:4:p:391-409

DOI: 10.1111/j.1540-6520.2004.00053.x

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