Selective Enforcement and Rent Extraction
Originally published in Public Finance and Management
This paper argues that government inaction can be a tool for extracting rents.
This paper argues that government inaction can be a tool for extracting rents. Politicians can harness government's power to selectively enforce laws and threaten enforcement in exchange for compliance with their demands. Selective enforcement is an attractive rent extraction method for lawmakers because it increases the credibility of their threats, allows them economize on the legislative process, minimizes the amount of voters their actions might offend, and allows them to capitalize on the economies of scale and scope the state's coercive power creates in an environment with selective enforcement. This mechanism suggests that zoning laws are ripe for selective enforcement, and provides a case study to support the thesis that observed selective enforcement in zoning is often rent extraction.