The Use of Financial Contracting Arrangements to Constrain Rent-Seeking Behaviour of Managers of Subsidiary Firms: Evidence from UK and US Multinational Subsidiary Firms

Indonesia is one of many countries in the world so called resource-rich country. Natural resources abundance needs to be managed in the right way in order to avoid dutch diseases and resources curses. These two phenomena generally happened in the country, which has abundant natural resources. Learned from Norwegian experiences, Indonesian Government need to focus its policy to prevent rent seeking activities. The literature study presented in this paper is aimed to provide important insight for government entities in focusing their policies and programs to avoid resources curse. From the internal audit perspective, this study is expected to improve internal audit’s role in assurance and consulting.

Download Full-text

Institutional Theory of Endless Redistribution

Voprosy Ekonomiki ◽

10.32609/0042-8736-2005-7-4-18 ◽

2005 ◽

pp. 4-18 ◽

Cited By ~ 5

Author(s):

K. Sonin

Keyword(s):

Property Rights ◽

Institutional Theory ◽

Growth Rates ◽

Rent Seeking ◽

Economic Institutions ◽

Wide Spread ◽

Grass Roots ◽

Protection Systems ◽

Private Protection ◽

The Rich

In unequal societies, the rich may benefit from shaping economic institutions in their favor. This paper analyzes the dynamics of institutional subversion by focusing on public protection of property rights. If this institution functions imperfectly, agents have incentives to invest in private protection of property rights. The ability to maintain private protection systems makes the rich natural opponents of public protection of property rights and precludes grass-roots demand to drive the development of the market-friendly institution. The economy becomes stuck in a bad equilibrium with low growth rates, high inequality of income, and wide-spread rent-seeking. The Russian oligarchs of the 1990s, who controlled large stakes of newly privatized property, provide motivation for this paper.

Download Full-text

On the Origins of Administrative Rent: Doing Business in a Russian Region N

Voprosy Ekonomiki ◽

10.32609/0042-8736-2010-5-58-80 ◽

2010 ◽

pp. 58-80 ◽

Cited By ~ 1

Author(s):

A. Oleinik

Keyword(s):

Rent Seeking ◽

Individual Decision ◽

Resource Rent ◽

Competitive Edge ◽

Doing Business ◽

Russian Region ◽

Positive Gain ◽

Access To The Field ◽

Quantitative And Qualitative Methods

In the article two types of rent are differentiated: resource rent and administrative rent. The latter is linked to restrictions on the access to the field of interactions. The contribution of the theory of public choice and the theory of rent-seeking and directly-unproductive activities is further developed by shifting the emphasis from individual decision-making to interactions between three actors: C, who controls access to the field, A, who gets a competitive edge as a result, and B, who assumes a subjacent position with regard to both A and C, yet still receives a positive gain from transacting. Domination by virtue of a constellation of As, Bs, and Cs interests is illustrated with the help of an in-depth case study of a Russian region. This study combines quantitative and qualitative methods, as well as their triangulation.

Download Full-text

The Impact of Sanctions on North Korea’s Foreign Trade from the Perspective of the Comparative Advantage Theory

Economics and Management ◽

10.35854/1998-1627-2019-6-4-15 ◽

2019 ◽

pp. 4-15

Author(s):

I. A. Korgun ◽

G. D. Toloraya

Keyword(s):

Foreign Trade ◽

Competitive Advantage ◽

National Economy ◽

North Korea ◽

Rent Seeking ◽

Economic Transformation ◽

Global Trade ◽

Negative Consequences ◽

The North ◽

The Impact

The presented study analyzes the opportunities for North Korea to capitalize on its competitive advantages in foreign trade in the context of sanctions.Aim. The study aims to identify mechanisms that allow North Korea to engage in foreign trade in circumvention of UN sanctions and to analyze their impact on the national economy.Tasks. The authors analyze the structure of North Korea’s national economy, its initial competitive advantage, identify the specific features of North Korea’s foreign trade in the context of sanctions, and determine the consequences of illicit trade in circumvention of sanctions for the national economy.Methods. This study uses an interdisciplinary approach that combines the classical theory of competitive advantage with the concept of rent seeking, with the concept of rent seeking and analysis of trade flows.Results. The study shows that, despite the restrictions imposed by sanctions, North Korea strives to make the most of its advantages, such as resource availability and cheap labor, in global trade. The country builds its own export-import chains in circumvention of sanctions. These chains are rather mobile, flexible, and controlled by the elite. As a result, benefits from trade that could be evenly distributed among the population are concentrated in the hands of a narrow segment of society. ‘Rent seeking’ makes it possible to formulate the negative consequences of these processes for the North Korean economy and the international community.Conclusions. Solving the North Korean issue requires an economic transformation in the country through the replacement of restrictive sanctions with more constructive ones. The exclusion of North Korea from open global trade leads to the country’s marginalization and impairs the transparency of international commodity flows.

Download Full-text