THE NEOCLASSICAL AND 'NEW' CONCEPTS OF RENT-SEEKING

Rent-seeking is both ubiquitous and inevitable. One would think the best and easiest way to avoid the rent-seeking problem is to avoid establishing the institutions that create rents. What one may fail to recognise is that the problem is much more general, that it is the presence of or potential for rights that leads to rent-seeking behaviour. All rights create rents by their very nature. Rent-seeking is both an agent-government phenomenon and an agent-agent phenomenon. The neoclassical rent-seeking concept has labelled the former as wasteful while ignoring the presence of the latter. The paper provides a different view of the problem and follows institutional concept of rent-seeking.