This study demarcates cost-inefficiency in Chinese banks into X-inefficiency and rent-seeking-inefficiency. A protected banking market not only encourages weak management and X-inefficiency but also public ownership and state directed lending encourages moral hazard and bureaucratic rent seeking. This paper uses bootstrap non-parametric techniques to estimate measures of X-inefficiency and rent...

The belief that elections reduce rent seeking by government officials is widely held, likewise the belief that rent seeking decreases as elections are less subject to corruption. In this paper we develop and test a model in which these beliefs are carefully examined. Our model indicates that, while elections may provide a disincentive for rent seeking, this disincentive (1) need not actually ma...

Innovations and their adoption are the keys to growth and development. Innovations are less socially useful, but more profitable for the innovator, when they are adopted slowly and the innovator remains a monopolist. For this reason, rent-seeking, both public and private, plays an important role in determining the social usefulness of innovations. This paper examines the political economy of in...

The establishment of a tradable permit market requires the regulator to select a level of aggregate emissions and then distribute the associated permits (rent) to speci…c groups. In most circumstances, these decisions are often politically contentious and frequently in‡uenced by rent seeking behaviour. In this paper, we use a contest model to analyse the e¤ects of rent seeking e¤ort when permit...

This paper studies the wasteful effect of bureaucracy on the economy by addressing the link between rent-seeking behavior of government bureaucrats and the public sector wage bill, which is taken to represent the rent component. In particular, public officials are modeled as individuals competing for a larger share of those public funds. The rent-seeking extraction technology in the government ...

This paper shows that a policy that uniformly increases contestants’ e¤ort costs can lead to an increase in total e¤ort. In asymmetric settings, this “levels the playing …eld”and therefore encourages weaker players (who otherwise would have stayed out) to enter. Paradoxically, a contest designer whose only objective is to maximize total e¤ort may thus wish to make rent-seeking “more di¢ cult.” ...

We consider n firms which choose rent-seeking expenditures sequentially, each player anticipating the rent-seeking expenditures that will be made by later movers. We find that the earlier movers need not make larger profits than later movers, and that aggregate profits are lower than in a game in which firms make simultaneous moves.