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: Luigi Zingales frames it by asking, "Why is there so little money in politics?" because a naive model of political bribery and/or campaign spending should result in beneficiaries of government subsidies being willing to spend an amount up to the value of the subsidies themselves, when in fact only a small fraction of that is spent. Possible explanations
Several possible explanations have been offered for the Tullock paradox: Voters may punish politicians who take large bribes, or live lavish lifestyles. This makes it hard for politicians to demand large bribes from rent-seekers. Competition between different politicians eager to offer favors to rent-seekers may bid down the cost of rent-seeking. Lack of trust between the rent-seekers and the politicians, due to the inherently underhanded nature of the deal and the unavailability of both legal recourse and reputational incentives to enforce compliance, pushes down the price that politicians can demand for favors. Rent-seekers can use a small part of the benefit gained to make contributions to the politicians who provided enabling legislation. Examples
Antichristus, a woodcut by Lucas Cranach the Elder, of the pope using the temporal power to grant authority to a ruler contributing generously to the Catholic Church
The classic example of rent-seeking, according to Robert Shiller, is that of a property owner who installs a chain across a river that flows through his land and then hires a collector to charge passing boats a fee to lower the chain. There is nothing productive about the chain or the collector.