Business and government: The new age of crony capitalism | The Economist - 1 views
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Rent-seeking” is what economists call a special type of money-making: the sort made possible by political connections. This can range from outright graft to a lack of competition, poor regulation and the transfer of public assets to firms at bargain prices. Well-placed people have made their fortunes this way ever since rulers had enough power to issue profitable licences, permits and contracts to their cronies.
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It identifies sectors which are particularly dependent on government—such as mining, oil and gas, banking and casinos—
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Second, the financial incentives for businesses may be changing. The share of billionaire wealth from rent-rich industries in emerging markets is now falling, from a peak of 76% in 2008 to 58% today. This is partly a natural progression.
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In China today the big money is made from the internet, not building heavy industrial plants with subsidised loans on land secured through party connections.