Administrative State
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Rent seeking (sometimes hyphenated asrent-seeking) is a term used to refer to the practice of an individual or organization seeking an economic benefit through politics and public policy. Examples of rent-seeking behavior includelobbying for or otherwise supporting the implementation of a favorable regulation, subsidy, or tariff.^[1][2][3] The gains obtained from rent seeking may be obtained directly, as in the case of a subsidy benefitting a particular class of firms, or indirectly, as in the case of a new regulation which creates abarrier to entry to a market or industry.^[4][5]

Background

Political scientist Paul M. Johnson and economists David R. Henderson and Mark J. Perry have all credited the economist Gordon Tullock with originating the concept that would come to be known asrent seeking in his 1967 article, "The Welfare Costs of Tariffs, Monopolies, and Theft;" however, Tullock did not use the term at the time.^[1][2][3] Tullock argued that competition among firms throughlobbying and political expenditures for tariffs and policies that promote monopolization is economically inefficient, even if some individual firms can gain in real terms from successful lobbying efforts.^[6][1]

David Henderson has credited economist Anne Krueger with introducing the termrent seeking in a 1974 article, "The Political Economy of the Rent-Seeking Society."^[1] In her article, Krueger discussed competition among firms in India and Turkey for import licenses as examples of rent-seeking behavior. She argued that the use of import licenses encouraged rent seeking and that the costs of rent-seeking activities are inefficient.^[7]

Examples of rent seeking behavior

InA Glossary of Political Economy Terms, political scientist Paul M. Johnson gave the following examples of rent seeking:^[2]

BothInvestopedia, an online financial and business encyclopedia, and Ben Casselman, writing forFiveThirtyEight in 2016, have argued that occupational licensing laws are often the result of rent-seeking behavior by incumbent firms. Both sources argue that licensing laws impose abarrier to entry on a particular industry or profession, making it more difficult for newcomers to enter and compete in an established market, and that in many cases this barrier may not be desirable.^[9][4]

According to Anne Krueger, rent seeking may or may not be legal, depending on the form that it takes:^[7]

See also

• Barrier to entry
• Bootleggers and Baptists
• Compliance costs
• Public choice analysis
• Regulatory capture

External links

• "The Welfare Costs of Tariffs, Monopolies, and Theft," by Gordon Tullock (1967)
• "The Political Economy of the Rent-Seeking Society," by Anne Krueger (1974)
• Search Google News for this topic

Footnotes

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Western Pacific Railroad Co. •Universal Camera Corporation v. National Labor Relations Board •Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council •Wayman v. Southard •Weyerhaeuser Company v. United States Fish and Wildlife Service •Whitman v. American Trucking Associations •Wickard v. Filburn •Wiener v. United States Terms Adjudication (administrative state) •Administrative judge •Administrative law •Administrative law judge •Administrative state •Arbitrary-or-capricious test •Auer deference •Barrier to entry •Bootleggers and Baptists •Chevron deference (doctrine) •Civil servant •Civil service •Code of Federal Regulations •Codify (administrative state) •Comment period •Compliance costs •Congressional Record •Coordination (administrative state) •Deference (administrative state) •Direct and indirect costs (administrative state) •Enabling statute •Ex parte communication (administrative state) •Executive agency •Federal law •Federal Register •Federalism •Final rule •Formal rulemaking •Formalism (law) •Functionalism (law) •Guidance (administrative state) •Hybrid rulemaking •Incorporation by reference •Independent federal agency •Informal rulemaking •Joint resolution of disapproval (administrative state) •Major rule •Negotiated rulemaking •Nondelegation doctrine •OIRA prompt letter •Organic statute •Pragmatism (law) •Precautionary principle •Promulgate •Proposed rule •Publication rulemaking •Regulatory budget •Regulatory capture •Regulatory dark matter •Regulatory impact analysis •Regulatory policy officer •Regulatory reform officer •Regulatory review •Rent seeking •Retrospective regulatory review •Risk assessment (administrative state) •Rulemaking •Separation of powers •Significant regulatory action •Skidmore deference •Statutory authority •Substantive law and procedural law •Sue and settle •Sunset provision •Unified Agenda of Federal Regulatory and Deregulatory Actions •United States Code •United States Statutes at Large Bibliography "Administrative Law - The 20th Century Bequeaths an 'Illegitimate Exotic' in Full and Terrifying Flower" by Stephen P. Dresch (2000) "Confronting the Administrative Threat" by Philip Hamburger and Tony Mills (2017) "Constitutionalism after the New Deal" by Cass R. Sunstein (1987) Federalist No. 23 by Alexander Hamilton (1787) "From Administrative State to Constitutional Government" by Joseph Postell (2012) "Interring the Nondelegation Doctrine" by Eric A. Posner and Adrian Vermeule (2002) "Rulemaking as Legislating" by Kathryn Watts (2015) "The Checks & Balances of the Regulatory State" by Paul R. Verkuil (2016) "The Myth of the Nondelegation Doctrine" by Keith E. Whittington and Jason Iuliano (2017) "The Progressive Origins of the Administrative State: Wilson, Goodnow, and Landis" by Ronald J. Pestritto (2007) "The Rise and Rise of the Administrative State" by Gary Lawson (1994) "The Study of Administration" by Woodrow Wilson (1887) "The Threat to Liberty" by Steven F. Hayward (2017) "Why the Modern Administrative State Is Inconsistent with the Rule of Law" by Richard A. Epstein (2008) Agencies Administrative Conference of the United States •United States Civil Service Commission •U.S. Government Accountability Office •U.S. Office of Information and Regulatory Affairs •U.S. Office of Management and Budget