| Initiator | Appelbaum and Katz |
|---|---|
| Introduced | 1987 |
| Synonym | rent-creating[1] |
| Rent-setting | |||||||
|---|---|---|---|---|---|---|---|
| Simplified Chinese | 设租 | ||||||
| Traditional Chinese | 設租 | ||||||
| |||||||
Rent-setting[2] (also spelled as rent setting;[3] simplified Chinese: 设租; traditional Chinese: 設租), also known as rent-creating, [4] refers to the act of governmentsorbureaucrats using their power to intervene in the market, resulting in the formation of new economic rents and creating rent-seeking opportunities for certain market entities.[5] In short, it means that the power itself committed an act in order to take a bribe.[6]
The concept of rent-setting was coined by Appelbaum and Katz in 1987.[7] This theory holds that since the regulator itself may become a rent-seeker, the rent-seeker itself will become a rent-setter and thus endogenously determine the size of the rent.[7]
Rent-setting is part of the chain of the rent-seeking process. [8] It can generally be divided into three types: unintentional rent-setting, passive rent-setting and active rent-setting.[9]
In a 'power-money' transaction, rent-setting is from 'power' to 'money', while rent-seeking is often 'money-power-money increment'. [10] In fact, rent seeking and rent setting are two sides of the same behavior and cannot be separated. [11]
