Krueger, AnneO. 1974."The Political Economy of the Rent-Seeking Society."
AmericanEconomicReview,64(3): 291-303.
Manygovernment policies,such as importlicensesin developingnations,
createrentsforsomemarketparticipants. Whilethepresenceofsuchrentsand
thedistortions thattheycreatehavelongbeennoted,thispaperrecognizedthe
importance of"rent-seeking behavior"andexploreditswelfareimplications. The
paper'scentralfindingisthatcompetitive rent-seeking increasesthewelfarecosts
ofpoliciessuchas traderestrictions. In thecontextofimportrestrictions, this
resultstrengthens thecase fortheuse oftariffs ratherthanimportquotas,since
quotascreatethepossibilityofrent-seeking behavior.Byidentifying theimportanceofrent-seeking activitiesandprovidinga framework foranalyzingtheir
welfarecosts,thispaperexpandedtheeconomicanalysisofthegovernment's
choiceofpolicyinstrument toachieveparticulargoals.Italsohelpedtolauncha
voluminousliterature ontheroleofcorruptionandgovernanceintheprocessof
economicdevelopment.