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Rent-setting (also spelled as rent setting; simplified Chinese: 设租; traditional Chinese: 設租), also known as rent-creating, refers to the act of governments or bureaucrats using their power to intervene in the market, resulting in the formation of new economic rents and creating rent-seeking opportunities for certain market entities. In short, it means that the power itself committed an act in order to take a bribe.

The concept of rent-setting was coined by Appelbaum and Katz in 1987. This theory holds that since the regulator itself may become a rent-seeker, the rent-seeker itself will become a rent-setter and thus endogenously determine the size of the rent.

Rent-setting is part of the chain of the rent-seeking process. It can generally be divided into three types: unintentional rent-setting, passive rent-setting and active rent-setting.

In a 'power-money' transaction, rent-setting is from 'power' to 'money', while rent-seeking is often 'money-power-money increment'. In fact, rent seeking and rent setting are two sides of the same behavior and cannot be separated.

See also

• Rent-seeking
• Rent extraction
• Economic rent

References

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8. Tak-Wing Ngo; Yongping Wu (4 December 2008). Rent Seeking in China. Routledge. pp. 193–. ISBN 978-1-134-03441-3.
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10. Chen Yijin (April 7, 1994). "An economic analysis of rent setting and rent seeking behaviour" (PDF). Economic Research Journal. ISSN 0577-9154.
11. Li Beifang (2016-08-18). "It is capital, not power, that seeks rent". Utopia.

• Factors of production
• Political corruption
• Public choice theory