Better to Own or to Regulate? The Case of Alcohol Distribution and Sales. (February 2017)

• Record Type: Journal Article
• Authors: Zullo, Roland
• Is Part Of: Administration & society. Volume 49:Number 2(2017)
• Page Start: 190
• Page End: 211
• Publication Date: 2017-02
• Subjects: alcohol regulation -- privatization -- new public management -- public ownership -- asset divestment; Public administration -- Periodicals; 351
• DOI: 10.1177/0095399714527754
• Languages: English
• ISSNs: 0095-3997

Abstract

Alcohol-related income generation is compared across monopoly and license off-premise alcohol regulatory models in U.S. states, 1977-2010. An optimum organizational-ownership mix is found when states directly own alcohol wholesale and employ a network of state-owned retailers serving urban regions and private agents serving less-populated regions. Per capita alcohol-related income in US dollars for these optimal systems was $58.82 compared with $26.72 with license systems. This disparity held after controlling for alcohol sales and retail hours of operation. The findings challenge the wisdom of asset divestment as a response to fiscal stress and contradict a central tenet of New Public Management (NPM) Theory.