Rent-seeking

Rent-seeking is the pursuit of economic gain by influencing rules or public decisions rather than creating new value. It can transfer wealth to favored parties while consuming resources in lobbying, protection, or other efforts.

Economic rent: Income above the minimum needed to keep a resource in its current use. Rent-seekers target these gains, often by securing rules that limit competition.
Gordon Tullock: An American economist and political scientist who helped develop public choice theory. His 1967 analysis identified the social costs of competing for monopoly privileges.
Rent control: A policy limiting the rent landlords may charge for housing. When controlled units are scarce, applicants may spend time and resources competing for access.
Profit: Revenue remaining after a business pays its costs. Profit can reward productive investment; rent-seeking targets gains through influence rather than value creation.
Monopoly: A market structure in which one seller faces no close competitor for a product. Rent-seeking can preserve monopoly power through barriers that prevent entry.
Lobbying: Organized efforts to influence public officials and policy decisions. Lobbying can seek regulations or subsidies that create economic rents for particular groups.
Anne Krueger: An economist whose 1974 paper analyzed rent-seeking in economies with import restrictions. She made the term central to economics by estimating resources wasted seeking import licenses.
Patent: A time-limited legal right that lets an inventor exclude others from specified uses of an invention. Patent lobbying can seek broader or longer exclusivity, though patents can also reward genuine innovation.
Entrepreneurship: The activity of organizing resources and taking risks to create or expand economic value. Entrepreneurial gains arise from new products or processes, unlike gains secured by restricting competition.
Barriers to entry: Conditions that make it difficult for new firms to enter a market. Lobbying for licensing limits or exclusive rights can raise these barriers and protect incumbents.

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