Title: Rent-seeking - Wikipedia
Headings: Rent-seeking
Rent-seeking
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Contents
Description
Tullock paradox
Possible explanations
Examples
Development of theory
Criticism
Possible consequences
See also
References
Further reading
External links

Content: The word "rent" does not refer specifically to payment on a lease but rather to 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. Rent-seeking is an attempt to obtain economic rent (i.e., the portion of income paid to a factor of production in excess of what 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 . In many market-driven economies, much of the competition for rents is legal, regardless of harm it may do to an economy. However, various rent-seeking behaviors are illegal, mostly through bribery of local and federal politicians, or corruption. Rent-seeking is distinguished in theory from profit-seeking, in which entities seek to extract value by engaging in mutually beneficial transactions.