Introduction:
There is a tendency to implement regulation for the betterment of society. Purportedly, consumer protection advocates claim that regulation insulates the public from harm. Safety regulations typically require costly design alterations as a harm reduction measure. Ironically, there are some unlikely beneficiaries of safety regulations.
Economist Bruce Yandle came to this realization while working for the Federal Trade Commission. To his surprise, many industry representatives were on board with these regulations. They were even concerned that government agencies would abolish these laws. Yandle was shocked by this counter-intuitive revelation as most safety regulations impede efficiency (Yandle, 1983, p.2) [1]. The true benefit of these restrictions was the artificial barriers to entry that effectively reduced competition (Yandle, 1983, p.2) [2]. Large corporations possess the resources to invest in research and development to accommodate new regulatory requirements. Smaller companies cannot afford to comply with the new mandates, effectively putting them out of business. Regulations can put severe hardships on small businesses that mimic a cartelization effect [3]. Large companies can achieve these advantages without even violating any antitrust laws!
These consequences are the byproduct of what Dr. Yandle has dubbed the Bootleggers and Baptists effect. It is the phenomenon in public policy where unlikely coalitions form to achieve common goals. The analogy used by Yandle, Baptists wanting to prohibit liquor sales on Sundays for moral reasons. In tandem, the Bootleggers support this restriction since this will eliminate the competition of legitimately licensed bars and liquor stores (Yandle, 1983, P. 2-3) [4]. Bootleggers can advocate for their self-interest under the aegis of the moral concerns of the Baptists. Shielding invested interest groups from public scrutiny. As the Bootleggers are criminals and laws are not a deterrent for them. A law banning liquor sales on Sundays will deter law-abiding alcohol vendors. Leading us to question whom the beneficiaries are of any zealously petitioned regulation.
This essay will be the first installment of a continuous series of real-life applications of this theory. The first essay will focus on the coalitions supporting the 1968 Gun Control Act passed in the United States.
The Bootleggers and Baptists
Baptists: Gun control Baptists
Bootleggers: Domestic gun manufacturers
Parameters of the 1968 Gun Control Act:
This specific gun control legislation is believed by many to be a direct reaction to the civil unrest of the turbulent 1960s. The political pressure mounted after the assassinations of high-profile political figures. Including president John F. Kennedy and civil rights activist Martin Luther King Jr [5]. Inner-city riots only intensified the fervor to pass gun control laws [6]. Some commentators have even hinted towards gun control measures in the 1960’s being racial bias [7]. More extreme civil rights advocates such as the Black Panthers were well known for regularly carrying semi-automatic rifles.
The combination of slain public figures and the raucous carnage of urban riots created the context for restrictions on gun ownership. After all, the outcry for gun control laws came out of concern for public safety. However, was the 1968 law evenly applied to all gun makers and vendors? Not exactly. The legislation tended to skew in favor of domestic gun manufactures. Dating back to the late-1950’s domestic gun companies in New England’s “gun valley” expressed to local politicians concerns over foreign competition (Newhard, 2015, P.2) [8]. The interests of domestic gun manufacturers become apparent, the desire to stifle competition from foreign producers. Most of the gun control measures of the 1960s; directed restrictions towards imported guns. The emphasis is that Lee Harvey used an Italian mail-order purchased rifle to kill JFK (Newhard, 2015, P.4) [12]. Complaints of “surging” numbers of cheap guns imported into the United States. The line between genuine concern for public safety and protectionism becomes blurred.
Beyond the salient nature of the protectionist proclivities of U.S. gun makers, there is also evidence that the legislation was unequally enforced against foreign gun producers. There were some asymmetries in the enforcement parameters of the 1968 bill; vendor licensing, mail-order arms purchases, and the sale and transportation of imported weapons became highly regulated (p.4-8) [9]. The bill mandated heavier licensing fees for mail-order gun vendors (Newhard, 2015, P.2) [10]. Many may argue that placing such restrictions on mail-order sales was worth the price of keeping firearms out of the hands of children. Such an argument ignores the implicit benefit of domestic producers. Before the internet, mail-order categories were the primary source for obtaining European rifles and pistols. Making it more difficult to purchase anything from Beretta, but guns made by Ruger could still be readily available for sale from brick-and-mortar retailers.
Shortly before the bill went into effect, many pundits speculate that may have been deliberate delays in the approvals of gun importation licenses. The legislation went into effect in October 1968; gun dealers had a deadline of December 15th (Newhard, 2015, P.5)[11]. Anyone versed in economic-behavioral patterns or just plain common sense could foresee the litany of vendors racing to get their licenses before the law passed. Despite the upsurge in requests for licenses, government officials dragged their heels when it came to approving them. It is surmised that the delay in approvals was a means of preventing a “flood of foreign handguns” from coming into the country before the law was enacted. This circuitous form of bureaucratic activism did more to hurt small firearms dealers than did promote public safety. Small-time foreign gun dealers found it easier to stop selling guns than continue to comply with the new laws (Newhard, 2015, P.4) [13].
Final Thoughts on the Dynamics of this B&B Dynamic:
This example is a classic example of ignoring the incentives of invested interests. I would argue that this is a defining feature of most Baptists and Bootleggers relationships. On one side, you have the advocates compelled by moral convictions. Who unwittingly provides the veiling moral cover for the self-interested bootleggers. If the bootleggers ever directly advocated for the policies that benefited them without the moral smoke-screen they would be derided by the average voter. Passively cloaking their interests under the veil of the public interest, the story changes.
The example of the 1968 Gun Control Act touches upon a point made by Bruce Yandle back in 1983; that there is a demand for regulation. There is an economic dimension of the promulgation of rules. Competition fosters the demand for more regulations; Yandle cites technological changes, demographic changes, significant changes in factor costs, and new information as factors for generating new laws(Yandle, 1983, p.3-4) [14]. Often there are anti-competitive consequences of imposing new safety regulations. Time and money are required to adapt business practices to the contingencies of compliance.
Inverted logic 
Excellent post. As it happens, “Bootleggers and Baptists” has to be my all-time favorite academic papers of all time, second only to “The Problem of Social Cost” by Ronald Coase!
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Thank you. This will be an ongoing series. I was really inspired by the concept. I have too agree I really like the paper. Clear, direct, and creative.
I have only recently came across yandle’s paper. My interest in political economy was more self-directed ( I never took an economics class in college). I have slowing accumulating more pieces to the puzzle.
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I agree that the “process of discovery” (to paraphrase the great Karl Popper) is a laborious and unpredictable one. For my part, I re-discovered Yandle’s paper several years ago at a workshop given by our mutual friend and public choice theorist Todd Zwyicki. Now, everytime someone proposes a new piece of legislation, I always apply the Yandle Test: who are the Baptists (the moral do-gooders or what I have called in a different context, “ideological rent-seekers”) and who are the Bootleggers (the economic interests who stand to benefit if the law is enacted)?
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Self-discovery has brought me down some interesting philosophical, theoretical , and ideological avenues.
I glad that professor Zwyicki has assisted in renewing your interest in the theory. It is compelling in the sense that it is intuitive and counterintuitive simultaneously.
I think most people question the motives driving the political process. Until, a law legislated that the individual perceives that it is in their best interest. For example, few people question the rationale behind a regulation imposed in the name of safety. It is the labeled as being just plain common sense. However, this is a superficial way of looking at the situation.
It is wise to step back and question who the covert beneficiary is behind the law. To apply that same incredulity leveled at politicians and direct it at advocacy groups ( interest groups , lobbyists).
It amazes me how many safety regulations that pass are skewed towards industry insiders. I wouldn’t be surprised if safety regulations have indirectly accounted for more antitrust exceptions than any formally sanctioned.
A regulation may not be in place for the right reasons. Also, it may not even perform the function it is purported to do. Then again it that is a while other issue.
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Excellent points. The classic formulation of the question — “Cui bono?” — shows us the wisdom of the ancients. What I like about Yandle’s contribution to politics is that the answer to “Cui bono?” can consist of both “ideological rent-seekers” (e.g. Baptists) as well as traditional economic rent-seekers (e.g. Bootleggers) and the motives of the latter part of the coalition are not so public-spirited.
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Yandle certainly addresses who benefits. Now this might be fairly obvious and I am merely paraphrasing Yandle, however, it appears as if the ideological rent seekers provide cover to the economic beneficiaries.
Without the guise of moral imperative obscuring the economic incentives. The bootleggers would not be nearly as successful. The general public tends to be very skeptical of those motivated by the potential of high profit margins. Making the Baptists the better spokespeople for any given cause.
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That is exactly right!
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P.S.: I coined the term “ideological rent-seekers” in this paper from the early 2000s: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=915929
Because my conclusions were unsavory (my paper suggests that many claims of “domestic violence” are probably forms of strategic behavior), no reputable journal would publish it, so I knew (even back then) that I was on the right track!
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Haven’t read your paper yet. Work has been crazy. It sounds interesting.
I take issue with academic journals refusing to publish it. After all, you are a social scientist and scientists need to acknowledge their findings regardless of whether the results are controversial. Granted , I know you are a lawyer by trade. Those studying Jurisprudence are most certainly social scientists. It isn’t an isolated discipline. It intersects with economics, philosophy and so much more.
I look forward to reading it with an open mind. It’s a shame that there is this variety of censorship impacting serious research.
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Thanks for you moral support and kind words. Now back to the trenches, or to paraphrase Shakespeare: “One more unto the breach, dear friend!”
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I read it. I can see how someone who is motivated by ideology or emotion could misinterpret your paper.
Psychological abuse is much more difficult to prove than physical abuse ( as you mentioned in the paper). The waters are muddied by the layer of subjectivity potentially distorting the perception of abuse. Depending on how you frame it a minor disagreement could amount to abuse. Something that any honest person would agree is an overreaction.
Due to the hearsay context of mental abuse, it makes the perfect strategical tool to level the playing field. Because of the high costs of pair bonding there is a lot to lose. A jilted lover may wanting to torch the bridge to spite their partner makes sense. The extensive emotional , temporal, monetary, biological investments appear to have been squandered. She invested all of those resources (some of which are intangible) for him to merely run off with Sally.
I have also witnessed custody disputes being weaponized in a similar manner. Use the kids as collateral to punish the ex-spouse for cheating , pursuing divorce , etc. The unfortunate facts are laws designed to protect women can also be used as means of institutional vengeance.
Also, nice work on coining “ideological rent-seeking”.
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Thanks! And yes, child custody battles are a paradigmatic example of the strategic use of family law. Law professors (myself included) spend a lot of our time dreaming of the perfect set of rules, but those rules are going to be gamed!
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Considering the flaws of human nature I don’t think that we can create rules that can’t be exploited. Someone can always manipulate a loophole. The rule no longer functions as intended. However, it is laudable goal to attempt to perfect rules that protect property and validate contract enforcement.
When rules become arbitrary , enforce ordinances that criminalized “ victimless crimes”, or otherwise infringe upon harmless personal interests they become unjust. However, I believe you and I are on the same page.
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Hear, hear!
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