The Political Economy of the Rentseeking Society - Literature review Example

The Political Economy of the Rentseeking Society Introduction This is a paper that is developed on the premise of the fact that the third world states slow development are not the fault of governments as most theories have postulated and gone ahead to justify (Evans 1990, p. 561). As a matter of fact the paper highlights the fact that it is the governments that are instrumental to the little development that the third world countries have been able to achieve. The success of such institutions is attributed to the numerous interlinked structures within the government that are instituted to help in improving efficiency with which such governments deliver services to the people (Lemarchand 1979, p. 237). In an effort to prove this the paper points out to a number of issues in the form of evidence to deviate the idea that it is in fact that governments that re slowing down the development of the third world nations ((Evans 1990, p. 568). Most of the people are to the idea that the governments are out to exploit the people and hence the numerous channels that have been put in place by governments to extort money from the innocent people. As such the paper disputes the description that the governments are not only being predatory, but also out to accumulate rent from the people. Such images however are not true as per the paper which feels that it is these rent collected that helps the government help the people to achieve the set out goals which wholesomely are aimed at at bettering the lives of the people. Whatever collections the governments make is done with the sole purpose of making the service delivery of the government more efficient and effective (Callaghy 1984, p. 16). The argument of today is that it is the government that is making it very hard to do business today because of the numerous legislations that they are putting in place. This is further worsened by the numerous levies introduced by the government at almost each and every stage and level of businesses, markets and entrepreneurial ventures (Leroy & Sakong 1980, p. 72). Such are the reasons that the paper note point out to the fact that the government is more of an impediment to business than a contributor to its success. As such the paper highlights that the state should as a matter of fact be shelved from being involved in the operations of the businesses and markets or rather weigh down the development strides that would otherwise be achieved fast over a considerably short period of time. Argument of the paper Freedom of operation and unfolding of the markets and business is something that this paper is against. Although not exclusively limited to this paper since also other scholars recommend the unlimited management of the markets for profits to be achieved (Kim 1987, p. 33). However, imagine a market or society with no legislation and governance, it is simply a replica for chaos, something that has best been avoided by government and the institutions that it has put in place to ensure and maintain law and order throughout the states as well as the different segments in which the citizens are involved (Choi 1987, p. 87). Putting the arguments aside, the consideration of how impactful the government and the different management’s structures have been to the people is something that would be worth appreciating. The arguments of the scholars against the role of the government in the management of the entrepreneurial activities are markets are far fetched and importantly, choose to ignore the numerous strides and achievements that have been made through the government institutions and the legislations that they have put in place (Hagopian 1986, p. 96). Arguments such as government being out to accrue a lot of wealth at the expense of the citizens, especially the entrepreneurs does not hold any water considering that all that is collected is channeled back to the people in other different forms for their own good. Numerous scholars have lauded the revenue collection idea of the government because it allows for the sharing of the resources between those who are well off and those who are unable to get access to such resources (Killick 1986, p. 63). Such a perception is one of the numerous reasons which show that the government hand in the management and guidance of entrepreneurship and markets is a very welcome idea that does not seem to affect anyone negatively (Gerschenkron 1962, p. 131). It is only the selfish individuals with their own individual interests that may feel offended with such measures put in place by the government and chooses to victimize the whole government and its structures as a result. It is important to note that the government is one organ which the states and its citizens cannot do without especially considering the implications of not having such structures in place (Migdal 1988, p. 89). The problem with governments is when there is a lack of proper accountability, especially due to lack of the necessary structures to put the government and its structures in check. One such example given in the article is the Zaire country in which numerous collections are done, but more often than not end up in the pocket of a few government individuals and their cronies. However, such few isolated cases do not justify the theories put in place by the different schools over the minimal role of the government with others going to the extreme case of calling for the doing away of such structures (Silvia 1985, p. 79). Honestly speaking, how long can states without proper governments be able to last without the necessary structures managed by the government to help the state control itself and subsequently grow and develop. One of the arguments in the defense of the difference in the management and performance of the different government is the fact that the states are not equal and do not operate in the same way as most theories assume when being postulated (Auster & Silver 1979, p. 52). Most of the scholars make assumptions of similarity in trends and performance patterns when concluding on matters to do with government roles in business, entrepreneurship and markets. This is not true and it is the first step in which the theories often make mistakes. It is therefore right to say that the theories are based on very wrong principles because they rely on unfounded assumptions which cannot be justified (Krueger 1974, p. 141). Each and every nation has a unique way in which it is run and that is why it may be difficult to compare the nations or use the conclusions made from the study of one nation to make generalizations on another state. Criticism of the article The article chooses to play safe and assume the concerns raised by the other scholars. For instance, it cannot be ignored that the introduction of the numerous legislations has significant impact on the performance of the different nations and the general outcome of the profits and development trends of the nations at large. Considering the instance given in the article like Zaire, where it is only a few that get to benefit from the rent collected, it is prudent to conclude that the development and growth of such a nation is stagnated since the performance of the country is grounded when plans are made yet there are not financed to implement such plans (Lemarchand 1979, p. 257). The structures put in place by the government subsequently become useless meaning that people in positions as a result of such structures are making a living from salaries that they have not earned. It has been proved that the freedom of markets is very instrumental in the performance of any market something that indicates that government input in the control and management of markets impedes the performance of such market. Although it may not be prudent to say that the legislations put in place have not helped the market it is also worthwhile noting that some of this legislation have crippled the operations of the markets and as such have hampered the ability of the market to outperform itself (Samuels 1987, p. 179). The best way to ensure the markets supersede expectations through performance is by ensuring that the performance of such markets is not held back by the numerous legislations instigated by the government. Freedom therefore is something necessary for accelerated performance and the government impeding on this is apparently affecting the performance of the different entrepreneurial processes and markets. Conclusion It is agreed that that the government is one structure which the states and its citizens cannot do without especially considering the implications of not having such structures in place. Honestly speaking, how long can states without proper governments be able to last without the necessary structures managed by the government to help the state control itself and subsequently grow and develop. The problem with governments is when there is a lack of proper accountability, especially due to lack of the necessary structures to put the government and its structures in check. Take for instance, in the article Zaire is a country mention in association with numerous collections are done, but more often than not end up in the pocket of a few government individuals and their friends (Lemarchand 1979, p. 260). However, such few isolated cases do not justify the theories put in place by the different schools over the minimal role of the government with others going to the extreme case of calling for the doing away of such structures. References Auster, R. D. & Silver M. (1979). The State as Firm: Economic Forces in Political Development. The Hague: Martinus Nijhoff. Callaghy, T. (1984). The State-Society Struggle: Zaire in Comparative Perspective. New York: Columbia University Press. Choi, B. S. (1987). "Institutionalizing a liberal economic order in Korea: The strategic management of economic change." Ph.D. dissertation, Kennedy School, Rarvard University. Evans P. B. (1990). Predatory, Developmental, and Other Apparatuses: A Comparative Political Economy Perspective on the Third World State. Sociological Forum, Vol. 4, No. 4, Special Issue: Comparative National Development: Theory and Facts for the 1990s. (Dec., 1989), pp. 561-587. Gerschenkron, A. (1962). Economic Backwardness in Historical Perspective. Cambridge, MA: Belknap. Hagopian, F. (1986). "The politics of oligarchy: The persistence of traditional elites in contemporary Brazil." Ph.D. dissertation, Department of Political Science, MIT, Cambridge, MA. Killick, T. (1986). "A reaction too far: Contemporary thinking about the economic role of the state, with special reference to developing countries." Unpublished manuscript. Kim, E. M. (1987). "From dominance to symbiosis: State and chaebol in the Korean economy, 1960-1985." Ph.D. dissertation, Department of Sociology, Brown University. Krueger, A. 0 . (1974). "The political economy of the rentseeking society." American Economic Review 64:291-303. Lemarchand, R. (1979). "The politics of penury in rural Zaire: The view from Bandundy." In Guy Gran (ed.), Zaire: The Political Economy of Underdevelopment: 237-261. New York: Praeger. Leroy J. & Il Sakong (1980). Government, Business and Entrepreneurship in Economic Development: The Korean Case. Studies in Modernization of the Korean Republic, 1945-1975. Cambridge, MA: Harvard University Press. Migdal, J. (1988). Strong Societies and Weak States: State-Society Relations and State Capabilities in the Third World. Princeton, NJ: Princeton University Press. Samuels R. J. (1987). The Business of the Japanese State: Energy Markets in Comparative and Historical Perspective. Ithaca, NY: Cornell University Press. Silvia R. (1985). "The political economy of Brazilian state-owned enterprises." Ph.D. dissertation, Department of Economics, University of Massachusetts, Amherst. Read More