Working Paper: NBER ID: w10984
Authors: Marc T. Law; Gary D. Libecap
Abstract: We examine three theories of Progressive Era regulation: public interest, industry capture, and information manipulation by the federal bureaucracy and muckraking press. Based on analysis of qualitative legislative histories and econometric evidence, we argue that the adoption of the 1906 Pure Food and Drugs Act was due to all three factors. Select producer groups sought regulation to tilt the competitive playing field to their advantage. Progressive reform interests desired regulation to reduce uncertainty about food and drug quality. Additionally, rent-seeking by the muckraking press and its bureaucratic allies played a key role in the timing of the legislation. We also find that because the interests behind regulation could not shape the enforcing agency or the legal environment in which enforcement took place, these groups did not ultimately benefit from regulation in the ways originally anticipated.
Keywords: Progressive Era; Pure Food and Drugs Act; Regulation; Consumer Welfare; Muckraking Press
JEL Codes: I1; N4; L5
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Public Interest (L44) | Adoption of the Pure Food and Drugs Act (L65) |
| Industry Capture (L19) | Adoption of the Pure Food and Drugs Act (L65) |
| Muckraking Press Influence (D72) | Adoption of the Pure Food and Drugs Act (L65) |
| Public Interest (L44) | Legislative Outcomes (D72) |
| Industry Capture (L19) | Regulatory Framework (G18) |
| Muckraking Press Influence (D72) | Public Opinion (D72) |
| Public Opinion (D72) | Political Action (D72) |
| Political Action (D72) | Adoption of the Pure Food and Drugs Act (L65) |