Tag: Public Choice Theory

  • Rent-Seeking

    Rent-Seeking

    Rent-seeking is when someone tries to get a larger slice of the wealth pie, instead of making the pie bigger. It can lead to unfair advantages and slow economic growth. It’s hard to distinguish from normal business, impacts innovation, and can create income inequality, especially in countries with weak governance.

  • Principal-Agent Problem

    Principal-Agent Problem

    The Principal-Agent Problem occurs when a person (the principal) hires someone else (the agent) to act for them, but the agent may not always act in the principal’s best interest due to differing information or motives. Solutions involve creating better incentives and transparency.