Rent Seeking, Noncompensated Transfers, and Laws of Succession

Abstract

My purpose in this paper is to analyze inefficiencies that may emerge from the noncompensated transfer of valued rights among persons. This source of inefficiency has not, to my knowledge, been fully incorporated either in the economic theory of property rights or in orthodox tax analysis. My discussion is based on the elementary fact that all noncompensated transfers are rents to the recipients. Implications for the emergence of rent-seeking behavior follow straightforwardly. The now-familiar propositions to the effect that rent seeking may dissipate economic value can be applied to a variety of transfer settings, only a few of which are explored in this paper.1 To the extent that the efficiency criterion is the relevant norm, direct implications may be drawn for policy with respect to the laws or rules for succession.