A note on revenue distribution patterns and rent-seeking incentive
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Date
2018
Journal Title
Journal ISSN
Volume Title
Publisher
EconJournals
Abstract
This paper presents a simple model of rent-seeking incentive to explain the emergence and dominance of the rapacious rent-seeking policies in a number of oil abundant developing and transition economies. The Hubbertian distribution of the commodity exports over time, the magnitude of these revenues, and the availability of offshore havens for the illicitly appropriated rent explain the shift from productive public policies to rapacious rent-seeking. In addition, we show that the existence of the well-functioning democratic institutions prior to the revenue boom precludes the emergence of rapacious rent-seeking institutions due to prohibitively high costs of rent-seeking. The paper complements the existing literature by delivering a novel theoretical rationale for the predisposition of the oil-rich countries to the resource curse.
Description
Keywords
Rent-seeking, Illicit appropriation, Hubbert Curve, Offshore havens, Point-source resources
Citation
Sadik-Zada, E.R. & Loewenstein, W. (2018). A note on revenue distribution patterns and rent-seeking incentive. International Journal of Energy Economics and Policy, 8(2), 196-204.