Natural Monopolies and Rent: A Georgist Remedy for X‐Inefficiency Among Publicly‐regulated Firms

A bstract . Publicly‐regulated firms are sheltered from competition and are inefficient. When analyzed within the theoretical framework of X‐inefficiency , it is discovered that they are subsidized by a quasi excise tax and result in deadweight losses to society. When the losses and X‐inefficiency are understood as rent , an appropriate public policy is to levy a tax on these firms. A tax would raise productivity and increase tax revenues without reducing output.