As early as 1970s, western economics established this special theory. In the 1970s, because of the transition of China's market economy system, corruption such as back door entry and kickbacks became serious. Economists borrowed rent-seeking theory to analyze this corruption phenomenon, which made this theory spread rapidly in China.
Rent-seeking behavior is characterized by large scale of funds, many subjects and diversified means. Rent-seeking behavior is characterized by its large scale of funds, especially in the real estate field, which is also very common. From 1980s to 1990s, the real estate industry in China entered a period of rapid development. At this time, in the process of land development, there are potential rents in land transactions, which are illegally obtained by some people using their privileges and taking rent-seeking actions. Because the industrial chain of the real estate industry is relatively long, there are many links involved. In this process, many rent-seeking subjects, including housing management, land planning audit and other departments, are collectively seeking rent through various rent-seeking means in this chain.
The sources of rent-seeking can be divided into three categories. In daily life, rent-seeking activities are the result of a behavioral intervention. It is precisely because of the use of power that the rent is generated. The different roles played by the power sector make the sources of rent-seeking fall into three categories. The first category is the power sector, which did not deliberately set rents, but only intervened in economic life to make up for the shortcomings of the market, but inadvertently caused rents. Mainly in the real estate market or land leasing market, because the authorities have formulated some unscientific policies on the allocation of funds or land, which leads to the unintentional establishment of rents.
The second is passive rent fixing, that is, some power departments sell a lot of cheap land to real estate developers for short-term performance requirements, and bring rent-seeking environment to developers through preferential policies. The third is active rent-seeking, that is, enterprises provide rents to power departments for power and money transactions, which is also the root of social corruption.
The bad result of rent-seeking is harmful to society. Rent-seeking is ubiquitous in our real life, which is not conducive to the economic development of our society. To some extent, it wastes resources, reduces operating efficiency and is harmful to the welfare of our whole society. Because the power department distorts the resource allocation function of the market and breaks the pattern of wealth distribution through privilege rent-seeking, which is not conducive to the long-term development of society and harmful to the development of society.
In a word, rent-seeking behavior is still harmful to our society. We need to further strengthen the reform of political system and promote the reform of market economy. The regulatory authorities should manage the rent-seeking behavior and increase the punishment when necessary. Group rent itself will not bring any wealth to society, but also waste more social resources, so we must resist rent-seeking.