David R. Henderson  

Anger B&B

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But the standard rendition of the B&B [Bootleggers and Baptists] story leaves out something that bootleggers and Baptists need to achieve their goals: emotion. One of the common emotions is anger, and the group whose anger is most important is voters.
This is from Dwight R. Lee, "Bootleggers, Baptists, Anger, and Voters," one of two Econlib Feature Articles for May.

In the article, Lee highlights anger as motivation (for voters) and as a tool (for bootleggers and Baptists.)

Lee concludes:

The B&B metaphor provides a useful way of thinking about how regulations are enacted in response to the political interaction of groups that have different interests and motivations and face different incentives. Smith and Yandle (2014) are to be congratulated for expanding on the insights from Yandle (1983) by creatively applying the B&B logic to a number of recent examples. This article expands those insights further by highlighting the role of voters and adding in anger as an important political motive. All political decision makers are influenced by emotions, but voters are particularly sensitive to emotions, both benevolent and hateful. And as government has increasingly become an arena for negative-sum competition over the distribution of existing wealth, political outrage can be expected to become an even more common influence on government decisions.


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COMMENTS (9 to date)
ThaomasH writes:

Whether or not a particular regulation is a negative sum outcome or not and how much is usually part of the discussion. Minimum wages are negative sum, though proponents tend to believe that the total loss is small. Regulating the CO2 output of coal-fired electricity generating plants is positive sum if EPA is correct about the harm from CO2 accumulation and particulate matter emissions.

Even in the B&B example, the Baptists would argue that the regulation was positive sum.

Moreover, as a political economy explanation for regulation B&B does not seem very generally applicable. How much political muscle do the bootleggers (posing as or donating as Baptists) bring to the effort to deregulate alcohol sales? How much political muscle do those who plan to become bootleggers (posing as or donating as Baptists) bring to the effort to restrict alcohol sales?

Do we owe our War on Drugs to an alliance of racists, prison guards, and crack dealers?

David R. Henderson writes:

@ThaomasH,
Do we owe our War on Drugs to an alliance of racists, prison guards, and crack dealers?
I think all three had huge roles: racists in beginning the drug war, and prison guards and drug dealers generally (not just crack dealers) in maintaining it.

Jon Murphy writes:

Whether or not a particular regulation is a negative sum outcome or not and how much is usually part of the discussion.

Whether or not something is positive sum or negative sum is only half the question. Remember, the goal is profit maximization, where MC=MR. The mere face something has positive net benefits is not enough if the opportunity cost(s) is/are greater.

ThaomasH writes:

I agree, but the racists in this analogy are the "Baptists" The question is how much do we owe to the prison guards and crack dealers? My theory is they're just the lucky "unintended consequences." An not very lucky as the elasticity of supply of prison guards and crack dealers was pretty high.

David R. Henderson writes:

@ThaomasH,
Are you missing the point a little? You’re arguing that B&B doesn’t explain much. At least that’s what I think you’re arguing. Dwight Lee argues that it explains a lot but leaves out an important factor: voters and their emotions.
I can’t tell from your comment whether you’re even arguing against his point.

David R. Henderson writes:

@Jon Murphy,
The mere face something has positive net benefits is not enough if the opportunity cost(s) is/are greater.
If you have computed net benefits correctly, then you have netted out opportunity costs.

Jon Murphy writes:

Prof. Henderson:

What I am thinking with my comment is ROI. So, let's say we have to projects, both of which can return a positive outcome (so net benefits occur). Let's say one project has an ROI of 5% and another an ROI of 10%. Given a situation where one can only choose one of those options, if you choose the ROI with 5%, you're giving up some gains even though the outcome is still positive.

At least, that's how I interpreted Thomas' comment focusing on "positive sum" and "negative sum."

David R. Henderson writes:

@Jon Murphy,
Ah, capital constraint. I get it. BTW, though, the right way is to choose the one with the highest NPV, not the one with the highest ROI.

ThaomasH writes:

David,

Yes, I was not clear about which version of the theory I though had limited explanatory power. Not having read the underlying papers it is possible I am missing something important.

In a sense, it is both. I do not see the fundamental importance of "emotion." Is that not just an aspect of why "Baptists" want the prohibition in the first place? And if those who will become "bootleggers" do not have much political clout, I do not see how emotion adds to the explanation. Perhaps the idea is that future bootleggers stir up emotion among "Baptists" against the kind of people who consume alcohol and (rather than present an iron-clad cost benefit analysis of the effects of prohibition).

Even in the reverse, where ending prohibition is under consideration, emotion among the "Baptists" will be important when some can feel they are opposing not only those who consume alcohol, but the evil doers who supply it. But here too, how do the "bootleggers" make up part of the prohibition alliance? Campaign funding? Astroturfing? Disproportionate mobilization of their immediate friends and family?

So does the insight that bootleggers benefit from the Baptists' desire to prohibit (and have an incentive to do what they can to see that they succeed) really help empirically explain the politics of the decision? It strikes me that the B&B theory is mainly just a (perfectly valid) argument directed at "Baptists," "Look who you are really benefitting with your position."

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