Rent-Seeking and Economic Growth (Empirical Evidence of Iran)

The purpose of this paper is introducing one endogenous growth model for analysis relation between rent – seeking and economic growth. While traditional models stressed the importance of labor and capital for economic growth، endogenous growth models believe that institutional and structural arrangements play a key role in explaining economic growth. There is a problem in dealing with empirical evidence effects of rent – seeking on economic growth، namely: measuring rent – seeking. This problem is caused, in empirical studies use different proxy for rent – seeking Variable. In this paper is used of average tariff rate and government size for rent -seeking variable. The estimate of growth equation shows that rent –seeking had a negative effect on economic growth during 1960-2002 in Iran.