Transaction Cost,Rent-seeking and Government Behavior——An Analysis from New Political Economy

From the viewpoint of New Political Economics, transaction cost is a necessary outcome of social economy running. Government play a very important role in diminishing the transaction cost to stimulate the economic development, while it may aggravate this cost and do a harmful effect on total society welfare due to rent-seeking. So it is a key approach to design a setting of effective institutions to restrain the negative government behavior.