in economics (see public choice theory), rent-seeking is spending wealth on political lobbying to increase one's share of existing wealth without creating wealth. the effects of rent-seeking are reduced economic efficiency through poor allocation of resources, reduced wealth creation, lost government revenue, increased income inequality, and national decline. current studies of rent-seeking focus on the manipulation of regulatory agencies to gain monopolistic advantages in the market while imposing disadvantages on competitors. the term itself derives, however, from the far older practice of gaining a portion of production through ownership or control of land. ==description== the idea of rent-seeking was developed by gordon tullock in 1967.http://www.econlib.org/library/enc/rentseeking.html the expression rent-seeking was coined in 1974 by anne krueger. the word "rent" does not refer here to payment on a lease but stems instead from adam smith's division of incomes into profit, wage, and rent. the origin of the term refers to gaining control of land or other natural resources. georgist economic theory describes rent-seeking in terms of land rent, where the value of land largely comes from government infrastructure and services (e.g. roads, public schools, maintenance of peace and order, etc.) and the community in general, rather than from the actions of any given landowner, in their role as mere titleholder. this role must be separated from the role of a property developer, which need not be the same person, and often is not. rent-seeking is an attempt to obtain economic rent (i.e., the portion of income paid to a factor of production in excess of that which is needed to keep it employed in its current use) by manipulating the social or political environment in which economic activities occur, rather than by creating new wealth. rent-seeking implies extraction of uncompensated value from others without making any contribution to productivity. the classic example of rent-seeking, according to robert shiller, is that of a feudal lord who installs a chain across a river that flows through his land and then hires a collector to charge passing boats a fee (or rent of the section of the river for a few minutes) to lower the chain.
Economics_terminology Political_corruption Political_economy Public_choice_theory Renting