مرکانتیلیسم کارآمد؟ سیاست های انحصاری حداکثرسازی درآمد به عنوان مالیات رمسی

The economics literature on mercantilism tends to emphasize gold hoarding and external barriers to trade as defining characteristics. Medieval institutions, however, included a host of internal barriers to trade as well as external ones, and monopoly privileges and high offices were often for sale. In this paper, we analyze how a stable unitary government's regulatory policies may be affected by revenues and other services generated by the efforts of rent seekers. Competition for monopoly privilege can be a significant source of government revenue that augments tax revenues, especially in settings in which collecting ordinary tax revenues is problematic. A revenue-maximizing government encourages greater monopolization than is compatible with economic efficiency, but sells monopoly privileges in a manner that promotes innovation and partially accounts for the deadweight losses associated with monopolized markets. Our analysis provides a possible public finance explanation for relatively successful authoritarian states that have relatively little corruption, but many internal and external barriers to trade.

One of many puzzles in economic history is the durability of medieval systems of regulation and monopoly privilege. Such long-standing systems of governmental “privilege” are commonplace throughout world history and include many relatively well-run and prosperous national states in the medieval period, such as England, France, China, and Japan, and also many smaller independent city states and principalities. There are also cases of modern societies that prosper in spite of similar formal and informal internal barriers to trade, as in contemporary Singapore and Korea.1 For the most part, economists regard policy decisions that limit access to local markets, professions, and to political offices to be serious mistakes, and evidence of errors in the economic theories that guide policymakers in those societies. Most economists believe that mercantilist practices are wealth reducing, rather than wealth enhancing. Our paper demonstrates that secure rulers may construct a variety of rent-seeking games to enhance their revenues and/or support from privileged groups, and may do so in a manner that nearly maximizes national economic income. We do not assume that such rulers are altruistic, but rather demonstrate that their position as residual claimants of national income leads them to approximately maximize income. We also demonstrate that considerable rent-seeking activity may be entirely compatible with this result. A “well-managed mercantilism” tends to increase wealth for the nation as a whole, relative to more corrupt or less well-managed states. Wealth in such prosperous rent-seeking states, however, may not be very broadly distributed. We combine Olson's (1993) approach to modeling dictatorship with the contemporary rent-seeking literature to demonstrate why this is possible. The literature on rent seeking has carefully examined the extent to which resources tend to be attracted to rent-seeking contests and the extent to which such uses of resources can be regarded as a deadweight loss. The most analyzed cases are those in which the competitive process for allocating monopoly or other privilege resembles a lottery game or an all-pay auction. Successful rent seekers obtain a government-provided privilege of some kind and realize net profits; although, overall, the participants in the contest for privilege earn no profits in the aggregate under the usual Tullock (1967), Krueger (1974), Posner (1975), Hillman and Samet (1987), or Ellingsen (1991) assumptions. Their efforts to secure favor, however, often provide benefits to those who must be influenced to secure the desired rents (Congleton, 1980). Insofar as government-determined rules of the game largely determine the incentives for resources to be devoted to various political allocation contests, governmental policies may be said to be directly responsible for any deadweight losses that result from those procedures. For the most part, the literature assumes that rent-seeking contests are an accidental consequence of other governmental policies or institutions. And, consequently, an implicit theme of most of the rent-seeking literature is that good governments should attempt to minimize the resources attracted to rent-seeking contests. The formal analysis of rent-seeking contests implies that governments can reduce rent-seeking expenditures in a variety of ways; for example, they may do so by reducing the number and value of grants, by insulating the process of distributing grants from individual rent-seeking efforts, and by encouraging competitive markets rather than monopolies.2 Consistent with these recommendations, theorists often note that societies in which rent-seeking activities are extensive are relatively poor ones (Krueger, 1974). More informed policies would free scarce resources for uses that are value adding rather than value reducing. In spite of this advice, most governments at least occasionally create rent-seeking contests. Moreover, in many cases, such contests are deliberately created to increase the level of rent seeking that takes place within a given society. The literature on corruption (Hillman and Katz, 1987 and Shleifer and Vishny, 1993) suggests a possible personal income rationale for such allocative procedures. Government officials may profit from rent-seeking contests. However, this hypothesis about the origin of rent-seeking contests still suggests that rent-seeking contests are accidents rather than government policy, because corruption in most countries is officially illegal. We suggest that top government officials – e.g. governments – may also have an interest in promoting competition for government favors. A relatively small strand of the rent-seeking literature demonstrates that rent-seeking contests can be designed with particular aims in mind (Glazer and Hassin, 1988, Gradstein and Konrad, 1999 and Moldovanu and Sela, 2006), but their analyses have not modeled the fiscal context in which rent-seeking contests are designed. This paper suggests that a well-managed, secure, “mercantilist” government may devise rent-seeking contests to enhance public revenues and political support among elites. We demonstrate that the consequences of a well-designed rent-seeking society need not be a grave as previous work suggests. We demonstrate that a government's interest in net revenues tends to cause it to (i) create rent-seeking contests (ii) in a manner that encourages innovation and accounts for deadweight losses, although it (iii) still reduce national output below maximal levels. Olson's insight that even a narrowly self-interested government has good reasons to take into account the effects of its policies on its citizens is clearly evident in our analysis. Our focus is on what is sometimes called “rent extraction” rather than rent seeking, per se (Appelbaum and Katz, 1987 and McChesney, 1997). That is, we take the results of the rent-seeking literature to be essentially correct, and examine the incentives for governments to contrive rent-seeking contests for monopoly and similar privileges. Such contests are certain to attract the efforts of rent-seekers, and the contests may be designed so that the state receives revenues (bid, bribes, or other useful services) from rent seekers in exchange for protection, at least in the short run. The rent extraction of interest here is possible only because of the efforts of rent seekers. We also demonstrate that in some cases the original Tullock rectangle understates outlays to secure monopoly privilege and potential rent-seeking losses, and also explore several limitations of the “encompassing interest” model of dictatorship developed by Olson (1993). The latter provides a partial explanation for the negative correlation between government corruption and economic development among authoritarian regimes (Ehrlich and Lui, 1999). Our analysis is not the first to note that a government may have a financial interest in official monopolies. Most of these studies, however, have been case studies of one kind or another. For example, Ekelund and Tollison (1996) use the rent-seeking approach to explain many of the monopoly practices of medieval churches and governments. Hillman and Schnytzer (1986) and Anderson and Boettke (1997) use the rent-seeking approach to analyze various aspects of the Soviet economy. They conclude that rent-seeking contests were designed, or at least emerged, in a manner that tended to increase the efficiency of central planning. Lott (1990) analyzes the reasons why government-owned monopolies may behave differently from privately owned monopolies.3 These analyses suggest that revenue concerns have informed the monopoly policies of many governments through time and that governments are not always predisposed to adopt policies that enhance competition. Our analysis suggests that a government's interest in revenues may lead it to actively discourage competition in some or most markets, because it is able to profit from the rent-seeking contests thereby created.4 Perhaps surprisingly, we demonstrate that the deadweight loss generated by a secure, well-organized, revenue-maximizing government's monopolization policies is much smaller than implied by the analysis of rent-seeking expenditures alone. Indeed, such mercantilist practices can be quite efficient, although they are not always so.

At least since Adam Smith, the classical and neoclassical approach to the analysis of monopoly has provided a consumer-welfare rationalization for vigorous antitrust policies in areas in which firms may coordinate their activities to achieve monopoly power. Apart from cases in which social welfare might conceivably be improved through a temporary grant of monopoly power to firms – as with patents and copyrights – most economists argue that governments should adopt policies that promote open markets and curtail, rather than increase, monopoly power.23 If the circumstances under which monopolization increases economic output are rare, it may be said that mainstream normative analysis neither supports nor explains the widespread use of governmental authority to create monopoly franchises and other formal barriers to entry. We do not disagree with the mainstream normative conclusion, but provide an alternative positive explanation for what is widely observed. The contemporary and historical record suggests that both monopolization and the sale of monopoly protection have long been significant sources of government revenue within a variety of institutional settings. Essentially all modern and ancient governments have used their power to create and sell “safe havens” from economic competition. In Europe and Japan, former state monopolies have been sold off in entirety to secure a higher price. On a smaller scale, in the United States, local governments have sold monopoly privileges to banks, cable TV providers, taxi cab, trash collection, and power companies. Other examples can be taken from history. Hamilton (1948), Ekelund and Tollison (1981), and Macleod (1988) report numerous examples of medieval rulers in England, France, Netherlands, Portugal, and Spain renting or selling monopoly privileges to raise money for government expenditures. In both Macleod's (1988) analysis of the early evolution of the British patent system and in Krueger's (1974) analysis of rent-seeking expenditures in contemporary Turkey and India, long-term investments to curry favor at court were often successful for individual rent seekers, but in aggregate cost far more than they were worth. That governments have long had revenue interests in monopoly profits is also suggested in Aristotle's discussion of monopoly. After telling the story of the Thalesian philosopher's success in monopolizing the market for olive presses (and thereby showing that scholars could be wealthy if they wished to be), Aristotle (1969/330 BC: ch. 11) notes that “The way to make money in business is to get, if you can, a monopoly for yourself. Hence we find governments also on certain occasions employ this method when they are short of money… we sometimes find that those who direct the affairs of state make this their entire policy” (italics added). Such a long-standing difference between economic theory and political practice is not likely to be caused by a failure to communicate sound economic advice to political leaders. We have demonstrated that incentives to create “economic safe havens” exist in settings in which a government profits directly (or indirectly) from competition among firms to be protected. An interest in such rent-seeking revenues – whether by a net revenue-maximizing leviathan or more moderate regimes – tends to induce governments to support monopolization levels that are above those that maximize national income or aggregate consumer surplus. Such policies, however, are not necessarily as bad as might be expected, because a net revenue-maximizing government has what Olson refers to as an encompassing interest. A well-informed and secure government's fiscal interests lead it to construct monopolization contests that encourage innovation and take account of deadweight losses from monopolization. The monopoly franchises sold by a secure well-run leviathan government have a Ramsey tax-like pattern in settings in which a good deal of reliable information exists about production costs and demand elasticities. Related public choice analysis suggests that the practice of enhancing government revenues by constructing monopolies is likely to be more evident in autocratic countries than in Western democracies. Political elites in such countries can prosper by inducing competition for rents in exchange for useful services (such as increased support or loyalty) for rulers as well as revenues for the treasury. Wintrobe (1998) argues that the purchase of government favors is a common characteristic of dictatorships. Developing countries also tend to have relatively ineffective tax-collection systems and so greater need for revenues from rent seeking contests. As corroboration of these predictions, indices of market openness suggest that competition-reducing policies are more common in Third World than developed countries, although it is not perfectly correlated with governmental type. Western democracies also have an interest in revenues, but their tax institutions are usually more effective and their majoritarian political institutions encourage politicians to take greater account of consumer interests. This does not imply that rent-seeking contests are never used as revenue sources in democracies, only that they are used relatively less frequently.24 Perhaps the most surprising of our results is that stable relatively well-organized states can rely extensively on monopolization for revenues, yet still be relatively prosperous measured in conventional ways — although their markets and citizens will be overmonopolized, overtaxed, and underserved by their governments.25 Auctions for monopoly privileges and other similar contests can be a relatively efficient source of revenue in settings in which “normal” tax instruments are relatively ineffective or politically difficult to increase and the government is in a good position to profit or receive useful services from those seeking monopoly privileges. The surprising government, from the perspective of our analysis, would be one that consistently discouraged all forms of monopolization.26