Definition
Rent-Seeking
Using political or regulatory processes to extract wealth rather than create it.
Definition
Using political or regulatory processes to extract wealth rather than create it.
Why It Matters
Rent-seeking is economically destructive because it channels resources into obtaining transfers rather than producing value. It is a major concern in antitrust, occupational licensing, and lobbying.
Policy Example
A professional association that lobbies to raise licensing requirements for their occupation (making it harder for competitors to enter) is rent-seeking. The existing practitioners gain market power at the expense of consumers and potential entrants, without creating additional value.
In Context