Where are the rent seekers?

In a remarkably simple and yet one of the most original and insightful observations of 20th century economics, Gordon Tullock pointed out that there are efficiency losses when public policies and political behavior create contestable rents. Tullock also observed that social losses from contesting rents appeared smaller than might be expected, so raising the question ‘where are the rent seekers?’ Tullock proposed that political accountability and ‘free-riding’ incentives in interest groups limit social losses from rent seeking. We affirm Tullock’s explanations, which apply differently under different political institutions. We compare Tullock with Gary Becker, who focused on deadweight losses from redistribution and concluded, in contrast to Tullock, that political redistribution is efficient. The comparison with Becker highlights the significance of the recognition of Tullock’s concept of rent seeking. By excluding rent-seeking losses from the social costs of redistribution, Becker could arrive at a conclusion more favorable than Tullock to an ideology that sees merit in extensive redistribution. Tullock’s model, although more encompassing of actual social costs of redistribution, would have been less welcome in the social democratic welfare state.     

Political Repression and Child Labour: Theory and Empirical Evidence

Most normative studies on child labour arrive at the conclusion that child labour is detrimental to social welfare. Child labour is, however, still prevalent in many developing countries even though in many of these countries it is forbidden by law. In this paper we develop a political‐economic model that explains lenient enforcement of existing child labour legislation. The most important implication of our model is that in countries with repressive political regimes enforcement is more lenient and child labour thus more prevalent than in countries enjoying political freedom. We test this implication and find that it is confirmed by the data.     

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Suboptimal segmentation: Assessing the use of demographics in financial services advertising

Marketers routinely make use of demographic-based segmentation as a means of targeting customers of financial services. This article builds on growing evidence that a demographic-based approach is ill-founded. Using a large sample we investigate whether demographic information is of use in segmenting customers and find little support for existing practice. Implications for researchers and managers are discussed.     

External orientation and domestic market promotion

The increasing differentiation among developing countries, revealed by many indicators, also suggests that they have need of differing trade and development strategies. The following article reviews the across-the-board advice offered by agencies including the World Bank to “the” developing countries—“outward-orientation”, integration into the world economy, trade liberalisation-in the light of persistent shortages of foreign exchange and the limited capacity for structural adjustment, diversification and raising export levels in low-income primary commodity, exporting countries.     

Ecology and competitiveness in Swiss industries

This article investigates ecological problems and their influence on competitiveness in two selected Swiss industries: food and transportation. Ecological problems defined at a bio-physical level and the ecological stakes defined at a socio-economic level will be analysed. The ‘matrix of ecological problems’ and the ‘matrix of ecological stakes’ are useful and powerful instruments for analysing these two levels. It will be shown that ecological problems and ecological stakes vary from industry to industry. Ecological problems lead to ecological stakes. The ecological stakes lead to ecological changes within the two industries. The central forces of competition are influenced due to ecological issues. In order to be prepared for these changes, companies have to develop strategies which meet both economic and ecological requirements. Examples for such strategies are given in the text.