Rent-seeking in general equilibrium: A didactic illustration: 1. Introduction

The seminal article introducing the notion of rent-seeking, which fascinates both theoretical and practical economists, is Gordon Tullock's "The Welfare Costs of Tariffs, Monopolies and Theft" (1967). The catchy but somewhat evasive term itself was coined some years later in a fundamental article by Anne O. Krueger (1974) which, however, does not refer to Tullock. Their insight has now been taken up and developed in two more or less disparate research fields of contemporary economics: Tullock brought a new stimulus into the theory of public choice, a field which he himself, together with James M. Buchanan...