Bootleggers and Baptists is a concept put forth by regulatory economist Bruce Yandle, derived from the observation that regulations are supported both by groups that want the ostensible purpose of the regulation, and by groups that profit from undermining that purpose. For much of the 20th century, Baptists and other evangelical Christians were prominent in political activism for Sunday closing laws restricting the sale of alcohol. Bootleggers sold alcohol illegally, and got more business if legal sales were restricted. Yandle wrote that "Such a coalition makes it easier for politicians to favor both groups.... the Baptists lower the costs of favor-seeking for the bootleggers, because politicians can pose as being motivated purely by the public interest even while they promote the interests of well-funded businesses.... take the moral high ground, while the bootleggers persuade the politicians quietly, behind closed doors."
Economic theory
The mainstream economic theory of regulation treats politicians and administrators as brokers among interest groups. Bootleggers and Baptists is a specific idea in the subfield of regulatory economics that attempts to predict which interest groups will succeed in obtaining rules they favor. It holds that coalitions of opposing interests that can agree on a common rule will be more successful than one-sided groups. Baptists do not merely agitate for legislation, they help monitor and enforce it. Thus bootleggers and Baptists is not just an academic restatement of the common political accusation that shadowy for-profit interests are hiding behind public-interest groups to fund deceptive legislation. It is a rational theory to explain relative success among types of coalitions. Another part of the theory is that bootleggers and Baptists produce suboptimal legislation. Although both groups are satisfied with the outcome, broader society would be better off either with no legislation or different legislation. For example, a surtax on Sunday alcohol sales could reduce Sunday alcohol consumption as much as making it illegal. Instead of enriching bootleggers and imposing policing costs, the surtax could raise money to be spent on, say, property tax exemptions for churches and alcoholism treatment programs. Moreover, such a program could be balanced to reflect the religious beliefs and drinking habits of everyone, not just certain groups. From the religious point of the view, the bootleggers have not been cut out of the deal, the government has become the bootlegger. Although the bootleggers and Baptists story has become a standard idea in regulatory economics, it has not been systematically validated as an empirical proposition. It is a catch-phrase useful in analyzing regulatory coalitions rather than an accepted principle of economics.
Literal example
In 2015, liquor stores in the "wet counties" of Arkansas allied with local religious leaders to oppose statewide legalization of alcohol sales. Where the religious groups were opposed on moral grounds, the liquor stores were concerned over the potential loss of customers if rival stores were permitted to open in the "dry" counties of the state.
