State Monopolies and Corruption

I know I already linked to Tom Cowell’s Philadelphia Weekly article on PA liquor laws when I purged my Google Reader feed earlier, but I really want to double down on badgering you to read it. I think this kind of flagrant petty corruption is exactly what you’d expect from a monopoly that both sells and regulates alcohol:

Questionable decision-making and poor business thinking are a persistent hangover at the LCB. It’s no secret that some state-run stores manage to lose money despite their local monopoly. But though the LCB has closed some of its worst-performing locations, its governmental status ensures that these moves can be subject to political influence from behind the scenes when a local pol wants to keep an unprofitable store open, even at the wider system’s expense. Concerns have been raised in the past when politically-connected developers secure a state-run wine and liquor store as a tenant, at what appear to be above-market rents. Neighborhood groups in Tioga protested the Broad Street store opening in 2004, when a company connected to the son of a senior aide to Gov. Ed Rendell nabbed a well-paying liquor store as a tenant in its new strip mall development. It’s probable that any back-door deals are the exception rather than the rule, but as long as government dominates the alcohol business, there will inevitably be questions and suspicions about conflicts, patronage and sweetheart deals brokered by those who enjoy a state-enforced monopoly to sell an essential good.