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The Determinants of Progressive Era Reform. The Pure Food and Drugs Act of 1906

In: Corruption and Reform: Lessons from America's Economic History

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  • Marc 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.
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Suggested Citation

  • Marc Law & Gary D. Libecap, 2006. "The Determinants of Progressive Era Reform. The Pure Food and Drugs Act of 1906," NBER Chapters, in: Corruption and Reform: Lessons from America's Economic History, pages 319-342, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberch:9989
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    References listed on IDEAS

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    1. Edward L. Glaeser & Andrei Shleifer, 2003. "The Rise of the Regulatory State," Journal of Economic Literature, American Economic Association, vol. 41(2), pages 401-425, June.
    2. Sukkoo Kim, 2001. "Markets and Multiunit Firms from an American Historical Perspective," NBER Working Papers 8232, National Bureau of Economic Research, Inc.
    3. Libecap, Gary D, 1992. "The Rise of the Chicago Packers and the Origins of Meat Inspection and Antitrust," Economic Inquiry, Western Economic Association International, vol. 30(2), pages 242-262, April.
    4. Law, Marc T., 2003. "The Origins of State Pure Food Regulation," The Journal of Economic History, Cambridge University Press, vol. 63(4), pages 1103-1130, December.
    5. McCluskey, Jill J., 2000. "A Game Theoretic Approach to Organic Foods: An Analysis of Asymmetric Information and Policy," Agricultural and Resource Economics Review, Cambridge University Press, vol. 29(1), pages 1-9, April.
    6. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
    7. Olmstead, Alan L. & Rhode, Paul W., 2004. "The “Tuberculous Cattle Trust”: Disease Contagion in an Era of Regulatory Uncertainty," The Journal of Economic History, Cambridge University Press, vol. 64(4), pages 929-963, December.
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    Cited by:

    1. Alexander Dyck & David Moss & Luigi Zingales, 2013. "Media versus Special Interests," Journal of Law and Economics, University of Chicago Press, vol. 56(3), pages 521-553.
    2. Daniel J. Smith & Macy Scheck, 2023. "Examining the public interest rationale for regulating whiskey with the pure food and drugs act," Public Choice, Springer, vol. 196(1), pages 85-122, July.
    3. Zeynep K. Hansen & Marc T. Law, 2008. "The Political Economy of Truth-in-Advertising Regulation during the Progressive Era," Journal of Law and Economics, University of Chicago Press, vol. 51(2), pages 251-269, May.
    4. Poitras, Marc & Sutter, Daniel, 2009. "Advertiser pressure and control of the news: The decline of muckraking revisited," Journal of Economic Behavior & Organization, Elsevier, vol. 72(3), pages 944-958, December.

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    More about this item

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • N4 - Economic History - - Government, War, Law, International Relations, and Regulation
    • L5 - Industrial Organization - - Regulation and Industrial Policy

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