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The social cost of contestable benefits

A major contribution of the public-choice school is the recognition by Gordon Tullock that contestable rents give rise to social losses because unproductive resource use. The contestable rents usually are politically assigned privileges. Contestable rents can also be found outside of government decisions. We describe the example of academia. The primary empirical question concerns the magnitude of the social loss from contesting rents. Direct measurement is impeded by lack of data and indeed denial that rent seeking took place. Contest models provide guidance regarding social losses. The social losses diminished because rent seeking in high-income democracies usually takes place by groups seeking collective objectives. Also accountability in democracies requires that rents be assigned in indirect ways that increase inefficiency in other respects. The proposal that rent seeking exists can have an ideological dimension.
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