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The optimal subsidization of Baptists by bootleggers

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Abstract

Rent-seeking bootleggers have an incentive to subsidize the lobbying activities of the public-interest minded Baptists. We demonstrate that unless a certain set of conditions hold, the optimal subsidy will be positive and will provide a moral smoke screen for rent-seeking activities. Consequently, it will be extremely difficult to identify the actual level of rent-seeking from the public interest activities. Therefore, current empirical estimates may well underestimate the actual level of rent-seeking in the regulatory arena.

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Authors and Affiliations

  1. Department of Economics, Iowa State University, 50011, Ames, IA

    Jason F. Shogren

  2. Appalachian State University, 28608, Boone, NC

    Jason F. Shogren

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  1. Jason F. Shogren
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Additional information

I am indebted to Garey Durden for several enlightening discussions on rent-seeking and regulation and helpful comments on an earlier version of this paper.

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Shogren, J.F. The optimal subsidization of Baptists by bootleggers. Public Choice 67, 181–189 (1990). https://doi.org/10.1007/BF00714398

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  • DOI: https://doi.org/10.1007/BF00714398

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