摘要：The purpose of this paper is to compare the role of "bad" governance andprice distortions on economic growth. We therefore present a general equi-librium growth model where some producers …nance a rent-seeking systemby setting the price for their intermediates in an olgopsonistic manner. Thismodel is applied to the Bulgarian economy, in particular to the agri-foodchain. From this application we …nd that as long as processors allocate realresources towards rent-seeking activities, there will be no signi…cant wel-fare gains from free trade. Thus, we …nd "bad" governance to be a strongimpediment to economic growth and development.
