Rentier state

As a rentier economy an economic system is called, in which the actors do not come into extensive proportions by own performance and factors of production used to prosperity, but by the utilization of structurally related scarcity layers, which are stabilized to the detriment of the general public and not overcome by higher production.

Definition pension

In general, pensions, portions of income, income, and payments that exceed their opportunity costs, ie the excess over the regular " value" of the economic factors used (labor, capital, raw materials, know- how, etc. ). The pension is determined by a short-term shortage situation ( demand over supply ), which allows a price increase without greater value. Such scarcity of documents can be provided by natural location factors, strong market power of the supplier (eg monopoly rent or rarely monopoly returns), but also by intentionally caused shortages, often by government regulations and interventions.

In any economic system such bonds are present, albeit in widely varying proportions. The appropriation can happen legally and illegally. In developing countries, is also just the factor of the so-called " global bond " not insignificant, consisting of the transfer of development cooperation.

Rent-seeking

Under competitive conditions, high pensions normally lead to the fact that production is optimized to reduce as the scarcity of an asset and thus also its transient increases in price. Rent-seeking, however, that the pension -seeking activity, does not attempt to reduce the shortage of goods, but to actually use the pension situation for maximizing the individual benefit. From an economic perspective, this approach could be considered critical because for the acquisition and sharing of pension resources are expended no longer for a more productive use factors (efficiency) are thus available. For the expenses as part of rent-seeking processes include: money, time, information gathering, setting up and interest organization, competition disabilities, legal and illegal means to influence ( institutionalized ) decisions (eg lobbying, corruption).

Rent-seeking can be promoted by governmental or supranational interventions or protectorates: if an attempt is made by means of protectionism to remedy market failure and to speed up the (industrial) development process. In this context, the susceptibility to external economic measures ( foreign exchange, duties, licenses) for rent-seeking clarified.

Price bonds and a monopsonistisch structured agriculture may favor the levy of export earnings by power elites who control a vulnerable for rent-seeking state. Foreign companies may be tempted to take advantage of this reindeer mentality and low social responsiveness such regimes; the purely profit- oriented bypass some of elsewhere valid wage and environmental standards contributes thereby ultimately help to stabilize the ruling clique. A critical example is the involvement of Shell in Nigeria can be considered.

Rentier states

The concept of " reindeer State " (Eng. rentier state or state pension ) was first introduced by Mahdavy in the economic literature. He thus describes states who gain a large share of their fiscal revenues from external pensions. External pensions are by foreigners, whether they are foreign companies, governments or individuals, paid to the State. For example, the income from the fees is an external pension for passage through the Suez Canal. Also include income for the transit of Russian gas through Ukrainian territory to the external pensions. At closer inspection, turn out to be even revenue from oil production as an external pension. Typically, royalties are viewed as compensation for the consumption of non-renewable resources. However, just oil-exporting countries in the Middle East will benefit from a producer surplus, the Arab vs. the one hand from the higher productivity. other development areas as well as from monopolistic pricing structures (keyword OPEC ) result. The oil revenues are in no relation to the other domestic economic activities of these countries. Government revenues from the other economic activities of the country are negligible.

The high revenues from external pensions often lead to misallocations, such as high concentration in a few places, hardly industrial exchange within the country, weakening of traditional sectors of the economy through resource misallocation and thus below-average economic growth.

This can be financial independence of the " state-supporting " (or to the State takes hold ) groups from their own people - so it has been in any case the story shown - this neglect the development of potential future, local funding sources. Inadequate institutional conditions are not improved and neither sought legal certainty or transparency nor political competition or expenditure control.

The rentier state can " transfer payments targeted way to move society groups to politically opportunem behavior. Way political loyalty (or at least the absence of overt opposition ) rewarded by about subsidies granted or jobs in the state bureaucracy to be created ."

In particular, the close links between political office and economic opportunities ( neo-patrimonialism and clientelism ) could pull for the ruling elites while allowing for policy alternatives and the financial descent to be. Escalating government spending therefore usually encounter little resistance or ( autocracy ) to be enforced by means of repressive and authoritarian politics. The efficient economies conflicting reindeer mentality is promoted and the rent-seeking behavior eventually leads to corruption and widespread patronage relationships. This means that the government competence and ultimately the legitimacy will eventually eroded, state collapse is imminent and is, for example - and especially - in Africa ( in states with large deposits of diamonds or oil about ) often the result.