Rent Seeking and Corruption in Financial Markets

Rent Seeking and Corruption in Financial Markets. Asim Ijaz Khwaja, May 25, 2011, Paper. "Financial markets are entrusted with the all-important task of intermediating capital to where it is most productive and maintaining a healthy balance between risk and reward. As a result, rent seeking, to the extent that it distorts this allocation, is deemed costly for an economy. This article draws on some of the recent literature on rent seeking in financial markets in order to present an analytical road map that we hope will be useful for researchers interested in this topic. It outlines recent advances and provides suggestions for some interesting questions that lie ahead..."