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Destructive competition : oil and rent seeking in Iran

Bjorvatn, Kjetil; Selvik, Kjetil
Working paper
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URI
http://hdl.handle.net/11250/162680
Date
2005-04
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  • Discussion papers (SAM) [578]
Abstract
In countries with poorly developed institutions, rent seeking may

impose serious costs for the economy. Our analysis demonstrates how

rent seeking distorts the economy through two channels. First, there

is the direct cost of the resources wasted in the rent seeking contest.

Second, rent seeking distorts firms’ investment decisions, and leads to

underinvestment. We conduct a case study of rent seeking in Iran in

order to gain a better understanding of the phenomenon. Iran is an

interesting case, both because it is a rentier economy in the oil rich

Middle East, and because its political system is highly factionalized.
Publisher
Norwegian School of Economics and Business Administration. Department of Economics
Series
Discussion paper
2005:8

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