Quotation of the Day…

by Don Boudreaux on June 14, 2013

in Regulation, Seen and Unseen

… is from pages 18-19 of the 2nd edition (2012) of Susan Dudley’s and Jerry Brito’s, Regulation: A Primer:

Bruce Yandle colorfully dubbed a special case of the economic theory of regulation the “bootleggers and Baptists” phenomenon.  Yandle observed that unvarnished special interest groups cannot expect politicians to push through legislation that simply raises prices on a few products so that the protected group can get rich at the expense of consumers.  Like the bootleggers in the early-20th-century South, who benefitted from laws that banned the sale of liquor on Sundays, special interests need to justify their efforts to obtain special favors with public interest stories.  In the case of Sunday liquor sales, the Baptists, who supported the Sunday ban on moral grounds, provided that public interest support.  While the Baptists vocally endorsed the ban on Sunday sales, the bootleggers worked behind the scenes and quietly rewarded the politicians with a portion of their Sunday liquor sale profits.

Modern-day stories of bootleggers and Baptists abound.  Large biotechnology companies join with food safety activists to encourage stricter regulation of new foods involving genetic engineering, thus putting smaller competitors who cannot afford the regulatory compliance costs at a disadvantage.  Tobacco companies supported legislation that would have required cigarettes to receive FDA premarketing approval, which would make it harder for new brands to enter the market.  Solar power manufacturers support regulation that inhibits the production of conventional, competing sources of power (oil, coal, and gas).

Be Sociable, Share!

Comments

comments

Add a Comment    Share Share    Print    Email

Previous post:

Next post: