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

economic impact analysis—and then to have the newly proposed rules reviewed by OMB officials.
    The Quality of Life Review process was the first in a series of presidential initiatives developed to monitor and manage the growth of regulation. Following President Nixon’s move, each subsequent president added new features to the review process that is today managed by the OMB Office of Information and Regulatory Affairs. A recent executive order issued by President Obama added a few important features to the review process, which we will touch on later. But in every case, presidents—who are in charge of all executive branch agencies and hire and fire their leaders—placed the review process within the White House.
    Generally speaking, the regulatory review process has one official purpose: to reduce the cost of achieving stated regulatory goals. Put another way, the focus is on economic efficiency, reflecting a desire to serve the public interest. Very few scholars in the early 1970s and 1980s saw federal regulation as a way to serve private interests. Adam Smith’s warning was not heeded. And there was little recognition that rules promulgated in the public interest might also win support by serving far narrower private ends. The theory of Bootleggers and Baptists had not yet seen the light of day.
    Four Modes of Bootlegger/Baptist Interaction
    Now that we have documented the rise of Bootlegger/Baptist activity in the form of social regulation, let’s revisit the four modes of Bootlegger/Baptist interaction we introduced previously. These modes are listed here in order of complexity: covert, noncooperative, cooperative, and coordinated. We start with covert strategies, where Bootleggers have not quite found their Baptist and thus try to assume the role themselves, albeit “covertly.”
    Covert Strategy
    Bootleggers aren’t shy about advocating directly for their own interests, as the billions spent each year on professional lobbyists amply demonstrate. Even when Bootleggers push their interests without the help of a Baptist group, adopting Baptist rhetoric is often still to their advantage. Restrictions on trade, for instance, tend to protect domestic producers from foreign competition at the expense of consumers—but saying so overtly is a poor way to win political support for such measures. Unsurprisingly, domestic producers who lobby for higher trade barriers use a covert strategy by claiming to have just the opposite aim: protecting consumers from their foreign competitors!
    Thus, we discover Francis Cabot Lowell, founder of the U.S. textile industry in Lowell, Massachusetts, successfully petitioning the U.S. Congress in 1816 to impose an 83.5 percent tariff on Indian cotton and English imports. The items, he said, “[were] made of very inferior materials and are manufactured in a manner calculated to deceive rather than serve the consumer” (Yafa 2005, 107). Again we find a public interest justification for constraining market supply. Lowell successfully agitated for legislation that raised his rivals’ cost in the international market, and then he artfully obtained a tariff exemption for his own firm. This story’s signal element is the two-fold process that raised rivals’ costs: the U.S. industry gained a competitive advantage over India’s producers, and Lowell gained a specialized payoff within the constrained market.
    The limits of the covert strategy may be illustrated in a more recent case: the January 2012 debate over a controversial piece of legislation known as SOPA—the Stop Online Piracy Act—whose passage had been deemed a top priority by the music and movie industries, as represented by the Recording Industry Association of America and the Motion Picture Association of America (Schatz 2012). Among other things, the law would have created a streamlined process for designating foreign-based Internet sites as havens for copyright piracy, requiring Internet providers to block them and