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Krueger: The political economy of rent-seeking

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Krueger. 1974. The political economy of rent-seeking. American Economic Review 3: 291-303.

Y = welfare/deadweight loss (from rent seeking)

X = competitiveness of rent-seeking, as defined by the nature of import restrictions

Main point: all capitalist societies have rents. These rents impose costs on society, but they impose even greater costs when the system invites competition for these rents.