The Political Economy of Drug and Alcohol Regulation During the COVID-19 Pandemic

Abstract

States tightly regulate access to alcohol and other substances. During the pandemic and related state of emergency, state and federal governments adopted a variety of regulations affecting this access. State shelter-in-place orders included decisions about whether liquor stores and marijuana dispensaries are essential businesses. Decisions about telehealth access to medical marijuana or treatments for substance use disorders were made at the state and federal levels. This paper examines the political economy behind these decisions, focusing on deviations from the norm including Pennsylvania’s decision to close state-run liquor stores. Interest groups and other political considerations help explain state and federal policy changes affecting access to alcohol and other substances.

Keywords: rent-seeking, public unions, alcohol policy, bureaucracy, public choice, COVID-19, illicit drug policy, unintended consequences, interventionism

JEL Classification: D72, D73, I18, H75