Analysis of the relationship between government size and rent seeking: The case of OECD countries

Rent-seeking is a form of political corruption that developed and developing countries face at different levels. Due to the artificially created privileges observed in rent-seeking activities, the private interest of a person or a small group in a society not only impairs the efficiency of resource distribution, but also causes the emergence of social costs. Economists concerned with the issue think that one of the causes of rent-seeking activities is the government size. This study looks at the effect of the government size on rent-seeking behavior. I use data from 30 OECD countries for the 2007-2017 period. Katz-Rosenberg model was taken as the basis for calculating the rent-seeking rate. Panel ARDL method was used to analyze the data. In this direction, the conclusion is that the government size does not have an impact on rent-seeking in the short run, but in the long run, the government size has a positive and statistically significant effect on rent-seeking. Keywords: Government Size, Government Grow, Rent-Seeking, Political Corruption