Source: EconLog
by Peter Calcagno
“‘Follow the money’ is a phrase used in many detective shows and political thrillers. Look for how the villain spent money on or received money from, and there is your culprit. The same is true when examining economic and political decision-making. In today’s world, it is common to talk about rent seeking behavior on the part of businesses. That is, it is economically rational for firms to spend their next dollar to gain profit (rents) from political privilege rather than a risky R&D project with an uncertain return. The interest group theory is pervasive in the study of modern economics and politics.” (04/26/24)