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

  • Marc T. Law
  • Gary D. Libecap

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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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10984.

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Date of creation: Dec 2004
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Publication status: published as The Determinants of Progressive Era Reform. The Pure Food and Drugs Act of 1906 , Marc Law, Gary D. Libecap. in Corruption and Reform: Lessons from America's Economic History , Glaeser and Goldin. 2006
Handle: RePEc:nbr:nberwo:10984
Note: DAE
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  1. Gary D. Libecap, 1991. "The Rise of the Chicago Packers and the Origins of Meat Inspection and Antitrust," NBER Historical Working Papers 0029, National Bureau of Economic Research, Inc.
  2. Sukkoo Kim, 2001. "Markets and Multiunit Firms from an American Historical Perspective," NBER Working Papers 8232, National Bureau of Economic Research, Inc.
  3. Edward L. Glaeser & Andrei Shleifer, 2001. "The Rise of the Regulatory State," Harvard Institute of Economic Research Working Papers 1934, Harvard - Institute of Economic Research.
  4. Alan L. Olmstead & Paul W. Rhode, 2004. "The “Tuberculous Cattle Trust”: Disease Contagion in an Era of Regulatory Uncertainty," ICER Working Papers 16-2004, ICER - International Centre for Economic Research.
  5. Law, Marc T., 2003. "The Origins of State Pure Food Regulation," The Journal of Economic History, Cambridge University Press, vol. 63(04), pages 1103-1130, December.
  6. Olmstead, Alan L. & Rhode, Paul W., 2004. "The : Disease Contagion in an Era of Regulatory Uncertainty," The Journal of Economic History, Cambridge University Press, vol. 64(04), pages 929-963, December.
  7. Akerlof, George A, 1970. "The Market for 'Lemons': Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, MIT Press, vol. 84(3), pages 488-500, August.
  8. McCluskey, Jill J., 1999. "A Game Theoretic Approach to Organic Foods: An Analysis of Asymmetric Information and Policy," 2000 Conference (44th), January 23-25, 2000, Sydney, Australia 123706, Australian Agricultural and Resource Economics Society.
  9. Darby, Michael R & Karni, Edi, 1973. "Free Competition and the Optimal Amount of Fraud," Journal of Law and Economics, University of Chicago Press, vol. 16(1), pages 67-88, April.
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