ABSTRACT
This chapter examines a variety of factors and forces at work that give rise to the performance of the political economy, particularly in the context of a representative democracy. It focuses on the several sectors of a nation state and their predicate underlying structure of rights through which scarce resources are channeled, namely: the market sector, the public sector, the nonprofit sector, the communal sector, and the open sector. The chapter discusses public policy formation as well as drift policy. It includes an abbreviated treatment of the role of social norms and standards on the character and fabric of economic life. The chapter identifies a fundamental problem that confronts law and economics-inspired market advocates who argue against rent-seeking activities. It explores the meaning, role, and implications of so-called rent-seeking behavior within a representative democracy.
