Ode to a rent seeker

This article talks about the emergence of oligarchs in West Aceh district. Oligarch is referred to here are those who dominate limited resources. Furthermore, this paper aims to examine the practice of rent seeking that played by businessmen after the local election process. Based on the study it can be concluded that; First, there is a strong connection between businessmen and candidates; clientelistic both emerging businessman who work on the basis of patronage; and third the practice of rent seeking in the distribution of government projects. Keyword: oligarch, rent seeker, local election, democracy

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Income Distribution and the Occupational Choices of Entrepreneurs

The B E Journal of Economic Analysis & Policy ◽

10.1515/bejeap-2012-0076 ◽

2013 ◽

Vol 14 (1) ◽

pp. 55-80

Author(s):

Julia M. Schwenkenberg

Keyword(s):

Income Distribution ◽

Search Costs ◽

Rent Seeking ◽

Tipping Point ◽

The Other ◽

High Quality ◽

Occupational Choices ◽

Average Production ◽

Rent Seeker ◽

Production Value

Abstract This article presents a model that analyzes the effects of redistribution on the occupational choices of entrepreneurs. Entrepreneurs can either engage in costly search for projects and produce or become rent-seekers who collect rents for reversing redistribution. The model illustrates that redistribution of aggregate output is possible until a tipping point is reached. Higher levels of redistribution decrease entrepreneurship, employment, and aggregate income. Which level of redistribution is too much depends on the degree of inequality inherent in the firm quality distribution and on the power of rent-seekers to alter redistributive outcomes. An exogenous increase in the ratio of average realized output to output produced at the lowest-productivity firm reduces the gains from entrepreneurship relative to rent-seeking. This happens because entrepreneurs expend search costs to find those high-quality projects that drive up the average production value, but only a few entrepreneurs can realize these big hits. Wages and rent-seeker pay-offs, on the other hand, depend on average realized production. An increase in the power of rent-seekers further reduces the government’s options. The model implies that the government’s ability to redistribute might be declining when inequality rises.

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