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The term rent-seeking is generally applied to politicians and government officials who seek benefits from the implementation of rules and regulations they administer. But the term is also used of those who benefit from the rent that, as it were, they pay to those in authority. Influencing government officials, and even government itself, to grant favours is an easy way of profiting in cultures where transparency is lacking and decision makers have discretion (which is generally a good thing) but without accountability (which is essential, with regard to discretionary decisions as well as finances).

This is one reason why governments should reduce the number of rules and regulations, and the number of times the public have to seek government approval for any initiative. This does not mean government should abdicate its responsibility of formulating and enforcing regulations, in the interests of equal opportunities and fair play. But too often regulations lead to individuals capable of winning favour easily obtaining approvals and support from officials, while members of the general public are driven from pillar to post to get answers, let alone permission. That is why, as the great Liberal statesman of the German Free Democratic Party put it, a country needs strong government, but it should be small.

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Rajiva Wijesinha

August 2013
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