Bootleggers and Baptists
Bootleggers and Baptists is a catch-phrase invented by regulatory economist Bruce Yandle for the observation that regulations are supported by both groups that want the ostensible purpose of the regulation and groups that profit from undermining that purpose.
For much of the 20th century, Baptists and other evangelical Christians were prominent in political activism for Sunday closing laws restricting the sale of alcohol. Bootleggers sold alcohol illegally, and got more business if legal sales were restricted. “Such a coalition makes it easier for politicians to favor both groups. . .[T]he Baptists lower the costs of favor-seeking for the bootleggers, because politicians can pose as being motivated purely by the public interest even while they promote the interests of well-funded businesses. . . . [Baptists] take the moral high ground, while the bootleggers persuade the politicians quietly, behind closed doors.”
The mainstream economic theory of regulation treats politicians and administrators as brokers among interest groups. Bootleggers and Baptists is a specific idea in the subfield of regulatory economics that attempts to predict which interest groups will succeed in obtaining rules they favor. It holds that coalitions of opposing interests that can agree on a common rule will be more successful than one-sided groups.
It is important that the Baptists in this story are not fooled, nor are they a mere public-relations front for the bootleggers. The Baptists sincerely want a law against Sunday sales of alcohol, although they are aware it will not prevent all Sunday drinking, that it will not get everyone to church and that it may enrich some criminals. They feel that the law will prevent some drinking, especially among younger and less determined drinkers, and also among people who can be shamed. It will promote cohesion within Baptists and prove their power to outsiders. Also, it will reinforce a community moral standard. That some drinkers will pay more money to some bootleggers matters little in comparison.
It is also important the legislation will be a straightforward implementation of the desired rule, not a law filled with sneaky loopholes to reverse its ostensible purpose. In fact, Baptists do not merely agitate for legislation, they help monitor and enforce it (a law against Sunday alcohol sales without significant public support would likely be ignored, or be evaded through bribery of enforcement officers). Thus bootleggers and Baptists is not just an academic restatement of the common political accusation that shadowy for-profit interests are hiding behind public-interest groups to fund deceptive legislation. It is a rational theory to explain relative success among types of coalitions.
Another key part of the academic idea, beyond the general conspiracy-theory version, is that bootleggers and Baptists produce suboptimal legislation. Although both groups are satisfied with the outcome, broader society would be better off either with no legislation or different legislation. For example, a surtax on Sunday alcohol sales could reduce Sunday alcohol consumption as much as making it illegal. Instead of enriching bootleggers and imposing policing costs, the surtax could raise money to be spent on, say, property tax exemptions for churches and alcoholism treatment programs. Moreover, such a program could be balanced to reflect the religious beliefs and drinking habits of everyone, not just certain groups. But the surtax is less help to the bootleggers, and not only does not accomplish the main objective of the Baptists, it actually puts the government in league with Satan. From the religious point of the view, the bootleggers have not been cut out of the deal, the government has become the bootlegger.
Although the bootleggers and Baptists story has become a standard idea in regulatory economics, it has not been systematically validated as an empirical proposition. It is a catch-phrase useful in analyzing regulatory coalitions rather than an accepted principle of economics.
Legislation and treaties to reduce global warming often command support of both polluters and environmentalists. While there are several possible interpretations of that (for example, polluters could be trying to forestall stronger legislation, or to involve themselves in the process to insert specific protections; environmentalists could be unaware of industry support or fooled by it) it has been held up as an example of bootleggers and Baptists. In this version of the story, the polluters are looking for taxes and regulations to reduce competition, hoping to gain more from ability to charge higher prices than it costs them to pay taxes and comply with regulations. Environmentalists don’t care that some users of carbon are paying more money to some carbon emitters, as long as total carbon emissions go down and society takes a public stance in favor of the environment.
In response to a 2010 ballot initiative to legalize cannabis in the state of California, many growers, who were operating illegally or growing for medical purposes (which was legal at the time), expressed opposition to the new law. While in theory legalization would make their operations no longer unlawful, the growers expressed concern that they would be damaged financially by the need to collect and pay taxes, plus the loss of the large profits to be had by selling into a black market soon to grow lower if legal competition occurred. Thus marijuana growers and anti-drug partisans played the roles of bootleggers and Baptists respectively, although in this case by opposing legalization rather than supporting prohibition.
Bootleggers and Baptists have been invoked to explain nearly every political alliance for regulation in the United States in the last 30 years including the Clear Air Act, interstate trucking, state liquor stores, the Pure Food and Drug Act, environmental policy, regulation of genetically modified organisms, the North American Free Trade Agreement, environmental politics, gambling legislation, blood donation, wine regulation, and the tobacco settlement. Not all of these are rigorous rational explanations. For example many do not consider why the bootleggers form genuine alliances with real Baptists rather than fooling or funding a front group. Other analyses merely describe the successful coalition without considering why it formed instead of possible alternative coalitions. For this reason, some economists regard bootleggers and Baptists as a libertarian slogan against all regulation rather than a serious piece of regulatory economics theory.
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- Yandle's retrospect on Bruce Yandle, "Bootleggers and Baptists: The Education of a Regulatory Economist." Regulation 7, no. 3 (1983): 12.
- Yandle discusses the story with Russ Roberts at EconTalk, a PodCast