Corporate Rent-Seeking and the Managerial Soft-Budget Constraint

Rodolfo Apreda
2003 Social Science Research Network  
This paper seeks to expand on two topical strands in Government Finance and Political Science literature, rent-seeking and the soft-budget constraint, so as to bring forth a strong linkage with corporate governance environments. It will attempt to accomplish this task by setting up a distinctive framework of analysis that hinges on incremental cash flows. Firstly, it claims that both rent-seeking behavior and the soft-budget constraint are worthy of being applied to corporate governance
more » ... governance learning and practice. Secondly, the paper contributes to focus on cash-flows reliability and managers' accountability. Thirdly, it is shown how conflicts of interest underlie rent-seeking behavior, and how the latter relates to the soft-budget constraint. JEL: G30, G34, D72, D74, D82
doi:10.2139/ssrn.499438 fatcat:yrracxcrevhmndc3lyfphkurau