Crises, Bootleggers, and Baptists in Regulation Open Access
The recent run up to the fiscal cliff and the looming sequester offer evidence that Washington politicians never want a serious crisis to go to waste, because crises provide opportunities to do
things they otherwise couldn’t achieve.
This “crisis rule” also serves as a useful accessory to a body of theory that seeks to explain the political economy of regulation. I first described the “Bootleggers & Baptists” theory of
regulation in an article in Regulation magazine in 1983. The theory's name draws on colorful tales of states' efforts to regulate alcoholic beverages by banning Sunday sales at legal outlets.
Baptists fervently endorsed such actions on moral grounds, while bootleggers tolerated the actions gleefully because their effect was to limit competition.