The political economy of smoking regulation and taxation

Although anti-smoking policies are on the political agenda in almost all developed countries, a general understanding of these policies is still lacking. Applying the majority voting model of Buchanan and Vanberg (Public Choice 57(2):101–113, 1988) to tobacco taxation and smoking regulation shows that different smoking policies are feasible, depending on the composition of the majority of voters with smokers and non-smokers: (1) internalization of spill-over costs with a mixed majority of smokers and non-smokers as well as (2) a combination of regulation and taxation with a non-smoker majority. Moreover, the influence of the tobacco industry is also discussed.