Bootleggers & Baptists: How Economic Forces and Moral Persuasion Interact to Shape Regulatory Politics Read Free Page A

storefront, which obligates them to pay sales tax on each purchase. Their common goal: to reduce loss of market share to Amazon, which they claimed was subsidized by favorable tax policy. As William R. Harker, senior vice president at Sears Holdings, said of Amazon’s sales tax edge: “I think it puts all retailers at a disadvantage. What we and other retailers are looking for is for the playing field to be level” (Kopytoff 2011).
    These seemingly disparate forces—Baptist leaders; major retailers Walmart, Best Buy, and Target; and small Main Street retailers—worked in tandem to vehemently oppose the tax exemption. As far as we know, the Baptists never met with the retailers to strategize. Nevertheless, the retailers undoubtedly welcomed the implied support of South Carolina’s largest religious denomination in the lobbying battle against Amazon’s special tax treatment. After all, with support from religious authority figures, their battle against Amazon took on a meaning beyond a mere commercial dispute. Alongside arguments about fair competition, the retailers had been empowered to question the very morality of an otherwise routine, profit-motivated attempt to manipulate tax assessment.
    The coalition of churchmen, major retailers, and Main Street merchants was initially successful. The South Carolina General Assembly reneged on the previous governor’s promise and voted to deny the Amazon exemption (Adcox 2011). But the story did not end there. After all, the Amazon distribution center was already under construction. Shutdown costs would be sizable. Amazon responded to the makeshift coalition by promising to build a second South Carolina facility that would employ hundreds of additional workers. That offer proved enough to tilt the political scales, and a second Amazon vote was favorable to the online retailer.
    We see the Amazon story as a perfect illustration of the Bootlegger/Baptist theory of regulation (Yandle 1983). As noted in the preface, the theory gets its name from two seemingly unrelated groups that both stand to gain from restrictions on the sale of alcoholic beverages. Baptist leaders lobby openly and enthusiastically for regulation of spirits; they prefer a world where less alcohol is consumed. Bootleggers, the illegal sellers of alcoholic beverages, happily support the laws as well; Sunday closings shut down legitimate sellers, thus expanding opportunities for bootleggers to sell their wares.
    The resulting laws never restrict the Sunday consumption of alcoholic beverages—no bootlegger worth his salt would support that. Instead, the typical restrictions generate differential effects across sellers. The rules set an output restriction that is monitored by Baptists, enforced by government, and enjoyed by bootleggers. 1 Along the way, some of the resulting bootlegger profits are undoubtedly shared with cooperative politicians.
    The Bootlegger/Baptist label is now applied to a wide variety of regulatory episodes where the term “Bootlegger” no longer implies illegal action but rather applies to political action in pursuit of narrow economic gains. 2 Moreover, the term “Baptist” does not necessarily indicate a religious motivation but rather group action driven by an avowed higher moral purpose or desire to serve the public interest. Since emerging in 1983, the theory has been used to illuminate countless examples of “strange bedfellows” who rally behind a shared political aim.
    Bootlegger and Baptist interaction is as old as recorded history, but we limit ourselves to tales from the past few centuries in political contexts similar enough to our own that lengthy background exposition can be avoided. Every story we relate is told for a purpose, and each contains specialized content that contributes evidence to a richer theory of political action. Although historic legacy is interesting and may be instructive, it is the growing imprint of Bootlegger/Baptist–abetted regulation that we think