Wednesday, January 28, 2009

Rent Stimulus

I recently mentioned "rent seeking" as a weakness in the argument for government provision of public goods. The idea (made famous by Anne Krueger and Gordon Tullock, among others) is that productive resources are wasted in attempts by political actors to move monopoly rights or other things of value away from other people and towards them. One classic example was under federal control of airline routes as airlines and their lobbyists spent big bucks to make sure they, and not some other airline, received the so-called "route authority" to fly from Oz to Shangri-la.

The Wall Street Journal's front page article this morning was an amazing and graphical depiction (it should have been rated PG-13 for "too intense for the weak stomached") of the swarm of lobbyists descending on Washington to make sure that their interests are protected, funded, and otherwise promoted in the current economic stimuls bills. My favorite example was on what seems like it should have been one of the most straight-forward parts of the program: road construction. But what I didn't know is that new road construction uses relatively more concrete and relatively less asphalt, while repair of existing roads typically uses more asphalt and less concrete. I will leave it as a homework exercise to guess which industries' lobbyists were working hard to make sure that the legislation imposes the "right" language with regards to new road construction versus old road repairs.

Shouldn't the old, old idea of "Thou shalt not covet ..." come into play someplace in here?

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