Public versus Private Liquor Retailing: An Investigation into the Behavior of the State Governments

Abstract

A traditional role of democratic governments has been to police or regulate the behavior of privately owned commercial enterprises. The dimensions of this regulatory role have markedly changed in the United States as government production or public ownership of enterprises has superceded private production in some markets. These publicly owned enterprises utilize resources which would otherwise be available for private production. Liquor retailing, which is privately owned and regulated by government in some states and publicly (or governmentally) owned in other states, is an ideal industry to use to investigate the relationship between the form of enterprise ownership and the intensity of regulation. Presently, fifteen state governments monopolize liquor retailing.' In the remaining thirtyfive states, the industry is privately owned and state regulated. This paper takes the form of ownership as given2 and concentrates on the effects the