The Political Economy of the Tobacco Industry

The purpose of this paper is to examine the politics and economics of one of our country's most profitable and influential cash crops: tobacco. Toward this end, one would apply elements of the theory of public choice to the analysis of political decision-making. The public choice model will be used to illustrate the legislative decision-making process as applied to the tobacco industry. Underlying the analysis is the rational assumption that powerful interest groups, such as tobacco, can influence the political sector in ways that benefit its industry. While tobacco provides numerous benefits to the economy in the form of revenues and profits, taxes, and the creation of jobs, the consumption of tobacco leads to numerous health difficulties. It has been repeatedly linked with many productivity-inhibiting diseases, as well as the premature death of its consumers. Health statistics have linked general tobacco use with 3 million worldwide deaths yearly. Accounting for nearly 20 percent of all cancer-related deaths, tobacco is known as the leading cause of preventable death and disease why, over a long period of time and until very recently, tobacco related costs have been given far less emphasis than related benefits. The public choice model assumes that individuals are not only rationally self-interested in private markets, but they are equally rationally self-interested in the public sector (Johnson, 1991; 11). According to public choice theory, elected government officials will generally allow their need for re-election to influence the decisions they make on behalf of, and for the supposed benefit of their general constituencies. A democratic representative system is, by its nature,