The Bootlegger/Baptist theory of regulation

The Bootlegger/Baptist theory of regulation October 7, 2014

Gambling tycoon Sheldon Adelson wants to outlaw online gambling, which threatens his casino industry.  So with the help of Sen. Lindsey Graham (R, SC), he has formed an alliance with Southern Baptists, who also oppose online gambling because they oppose gambling in general, including what goes on in Mr. Adelson’s casinos.  So we have a gambling magnate using gambling opponents  to help him eliminate competition.

But this paradox is not new.  There was also an alliance between bootleggers and (again) Baptists in promoting Prohibition.  In fact, the phenomenon has a name in the field of economics:  The Bootlegger/Baptist theory of regulation.

From Bruce Yandle & Adam Smith, Gambling On The Baptists: A Casino Magnate Reaches For The Collection Plate | The Daily Caller.

The Casino magnate [Sheldon Adelson] has found an unlikely support group in the guise of resident Baptists. In Senator Graham’s own words, “Sheldon and the Baptists are one with this. The Baptists in South Carolina and Sheldon have become one person on this idea.” A match made in heaven indeed.

This peculiar match is actually nothing new. It is just one of many examples of the Bootlegger/Baptist theory of regulation in practice. This theory shows how moral interests (“Baptists”) and economic interests (“Bootleggers”) often align to fulfill mutually beneficial goals, as they once did with the prohibition of alcohol.

When an older generation of Baptists cried out against the abuse of spirits, bootleggers gleefully cheered them on in anticipation of unprecedented profit opportunities. It was only when these bootlegger interests became so apparent that even the political layman found Baptist outcries hard to swallow that Prohibition was overturned.

What makes this recent episode unique is that the political broker, Senator Graham, is so explicit about the reason for supporting this initiative. It is rare to see such a painfully obvious example of the Bootlegger/Baptist theory in practice. In fact, until this recent episode, the good Senator has shown little interest in the issue; that is, until Mr. Adelson did.

While supporting a bill banning online gambling may be easy in the land of the Baptists, it is really the Bootlegger that drives the underlying politics. As one congressman put it, this is simply a crass example of using the “government as their enforcement arm.”

From Sunday Blue Laws to environmental protection to health care reform, Bootlegger interests are often lurking in the background waiting to get their hands in the government till. The reason is that Bootleggers have so much to gain from government benefits and so much to lose when legislation goes the other way. What keeps these economic forces in check is the availability of moral cover for their actions. Put another way, a Bootlegger without a Baptist is like the emperor with no clothes. Lobbying for government for pure self-interest is a losing hand. But if a respectable front becomes available, then the sky’s the limit.

Messrs. Yandle and Smith have written a book on the subject:  Bootleggers and Baptists: How Economic Forces and Moral Persuasion Interact to Shape Regulatory Politics


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