Rent extraction by capitalists

Rent extraction by capitalists is present if the capital income share exceeds the capital output elasticity. Based on a sample of 111 countries during the period 1970-2010, panel model estimates show that: (i) the average capital income share significantly exceeds the average capital output elasticity; (ii) the difference between the average capital income share and the average capital output elasticity has increased over time; (iii) in democracies the average capital income share is not significantly different from the average capital output elasticity. The findings suggest that there exists more rent extraction by capitalists in autocracies and anocracies than in democracies.