Rent-seeking in the classroom and textbooks: Where are we after 50 years?

We are heavily indebted to an insightful referee for the motivation and insights contained in this paragraph.

In discussing the importance of Krueger’s work, Arrow et al. (2011) note how influential her work has been in the field of development economics. While not a focus of our paper, we did survey all undergraduate and graduate economic development textbooks to see whether rent-seeking was covered there and how extensively. Every economic development textbook discussed rent-seeking and its importance, usually in relation to public corruption. Most, but not all texts, cite Krueger’s seminal article, but no economic development textbooks mention Tullock. Our reading of the economic development texts suggests that rent-seeking is seen as much more important in that field than in public economics. We hope to explore the difference between the coverage of rent-seeking in public economics and economic development textbooks in a future paper, and we are grateful to an anonymous referee for suggesting this avenue of research.

To the best of our knowledge there is no study that directly compares Eqs. 2 and 9, both of which show the total investment in rent-seeking. A direct comparison may not be possible given the different set up for each analysis, i.e., Tullock (1980) uses the mathematics of lotteries while Krueger (1974) uses a (general) equilibrium model. Nevertheless, it is important to stress that the intuition from both are the same: people will invest (at least) the amount of the rent in trying to acquire it. We would like to thank Roger Congleton for helpful insights and suggestions on this question.

Calcagno (2015) provides an broad discussion of public finance textbooks and the extent to which they cover material at the core of public choice.

We are thankful for a helpful referee comment in pointing out this important aspect of how rent-seeking is covered

At the suggestion of an insightful referee, we looked at the course offerings and publicly available syllabi for top US programs in economics. Given the nature of academic placements, the graduates of those programs likely will be teaching future economics department faculty members. We could find no evidence of rent-seeking being explicitly covered in graduate public economics courses, at least among the top-20 programs.

Shughart (2015) provides an excellent discussion of conducting a one round all-pay auction in his masters-level public choice class.

An insightful referee asked us if any of the introductory textbooks mentioned rent seeking when talking about monopolies or tariffs. While we did not have access to the full texts of the principles’ textbooks discussed in Fike and Gwartney (2015), we read the treatments of monopoly and tariffs in Gwartney et al. (2018), Krugman and Wells (2012), Mankiw (2014) and Hubbbard and O’Brien (2017). With the exception of Gwartney et al. (2018), none of those texts discuss rent seeking when talking about monopolies or tariffs. Gwartney et al. (2018) mention rent-seeking expenditures possibly exceeding monopoly profit.