The Transitional Gains Trap

Once a government policy is in place, it is almost impossible to repeal. As Gordon Tullock points out, this is especially true when a policy is the result of rent-seeking — a private company using government to secure ill-gotten gains. Tullock explains this “transitional gains trap” on p. 68 in volume 5 of his collected works, The Rent-Seeking Society:

The problem posed by the transitional gains trap is the ratchetlike nature of rent seeking. Once a rent has been successfully sought out through government lobbying, it is very difficult to remove even after it has ceased to produce positive benefits for its rent-seeking beneficiaries. Its elimination almost always implies losses for those who now exercise the privilege. To avoid such losses, they will rent-seek yet again to retain the privileges. Politicians are rightly reluctant to inflict direct losses on specific sections of the electorate — inevitably a losing strategy.

Once in place, always in place. Inertia wins.

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