Empirical Evidence on Rent-Seeking Costs

Abstract

The literature on rent seeking has proven to be very fruitful in its theoretical dimension. However, empirical attempts to estimate the effects of rent seeking have shown that the measure of the rent-seeking costs is elusive. The purpose of this chapter is to provide an updated review of the empirical literature that has sought to estimate the social cost of rent seeking. The most relevant papers are classified, analyzed, and then summarized. An important lesson is that the complete dissipation hypothesis should not be assumed without further explanation, as the papers that address this question show that dissipation is far from complete.