Bootleggers and Baptists
Have you ever wondered why it is illegal to purchase alcohol in many U.S. cities, states, and counties on Sunday? It is not illegal to drink alcohol on Sunday. Professor Bruce Yandle explains that such laws benefit two distinct groups: bootleggers and Baptists. The Baptists benefit because they have seen to it that alcohol sales are nonexistent on Sundays. In their view, this means a reduction in the alcohol available. Bootleggers also like these laws. Sunday is the day they can sell alcohol—often purchased from legitimate stores on Saturday—for a handsome profit.
The bootleggers and Baptist theory of regulation can be extrapolated to other types of regulation, and helps explain characteristics of government regulation. It has to do with coalitions of people who do not necessarily meet and organize but who want the same outcome. In the case of bootleggers and Baptists, both groups like to see liquor stores closed, albeit for completely different reasons.
Prof. Yandle explains how the theory applies to environmental regulations. When the U.S. Environmental Protection Agency creates new standards that do not apply to existing organizations, two groups benefit: environmentalists and owners of existing plants not subject to the new standards. Environmentalists lobby for the stricter standards and are pleased when the standards become law. Existing plant owners benefit because the new regulations will make it more difficult for new competitors to enter the market. The bootlegger and Baptist theory applies to many regulations. When you hear of new regulations, try to see which groups benefit.