Rent seeking at the margin? Theory and evidence from UNESCO World Heritage List

We analyze, theoretically and empirically, how rent seekers allocate resources between alternative rents in the context of UNESCO’s World Heritage List (WHL). In the model, representatives of member countries lobby UNESCO to include national sites in the WHL. Sites can be either of high or low quality; in the first case, their renown alone guarantees enlisting, while in the second lobbying is necessary. The value of the rent corresponds to the increase in tourism generated by enlisting, which is greater for sites of lower quality, because of their initial lower renown. The costs of rent seeking correspond to the financial resources spent and the loss of reputation that the representative suffers when he supports low quality sites. Given UNESCO’s institutional structure, this loss is higher when the representative acts in the World Heritage Committee, which gives him greater visibility. The model predicts that the representative promotes high quality sites when he sits in the committee, to increase his reputation, and lobbies for low quality sites when he is not a member, using the country’s financial resources. The estimates confirm this prediction, as member countries are found to usually regularize their budgetary position before they propose lower quality sites and to support high quality ones when they sit in the committee. This confirms that rent seeking is conducted at the margin.