Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
9724138 | European Journal of Political Economy | 2005 | 21 Pages |
Abstract
This paper incorporates rent seeking from state coffers into a general equilibrium model of economic growth and endogenous policy. Self-interested individuals try to extract, for personal benefit, part of tax revenues that could be used to finance public investment. We solve for a non-cooperative Nash equilibrium in individual agents' behavior. The determinants of rent seeking in general equilibrium are identified and we consider the efficient size of public sector given the rent-seeking activity. Cross-country data from 108 rich and developing countries provide support for our predictions.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Hyun Park, Apostolis Philippopoulos, Vanghelis Vassilatos,