The aim of this paper is 10 survey critically the recent literature on rent seeking and Directly Unproductive Profit‐Seeking Activities (DUP). The links with the related literatures on transactions costs and property rights are also explored. It is argued that a clearer understanding of wasteful competition emerges if the framework of constitutional economics is adopted. It is furthermore argued that a dynamic framework is most suitable to analyze wasteful competition

Recent work in macro theory suggests that a m a t e 'demond' politics have direct srcppiy-side effects in the short run, i f LucasS standard specijication of the nonlinear adjustmen! costs for caprrol Economic Theory 2 339-47. 141-95. 275-302. 947-56. RNicw 71.896-908. Rcc0rd64,209-15. ECOMI~~~CS 17,847-54. 1. 15-29.

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