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Sri Lanka airport taxis: A paradise of rent-seekers

Sept 22, 2009 (LBO) - Rent-seeking, the use of one’s time, knowledge and efforts to earn an income which is not directly contributory to the national wealth, has been frowned upon by economists for many decades. Jagdish Bhagwati, Columbia University economist, branded India’s economy as a paradise for rent-seekers when India had everything under control, nicknamed ˜licence raj’, since independence in 1947 to mid 1990s.

He in fact coined the phrase ˜directly non-productive economic activities’ to describe India’s vast-spread rent- seeking economy.

Rent-Seeking is as Harmful as Money Laundering

Like money laundering, rent-seeking too is harmful, injurious and inimical to the good health of an economy.

However, the irony has been that, politicians in both developing and developed countries, while taking action on a global basis to outlaw money laundering, have by word and by deed promoted opportunities for ˜rent- seeking’ in their respective economies.

Hence, the recommendation which mainstream economists often make to policy makers in governments that a full-stop should be placed to rent-seeking if an economy is to grow on a sustainable basis has been largely left

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