The optimal subsidization of Baptists by bootleggers |
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Authors: | Jason F. Shogren |
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Affiliation: | 1. Department of Economics, Iowa State University, 50011, Ames, IA 2. Appalachian State University, 28608, Boone, NC
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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.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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