Why Did the Clayton Act Pass?: An Analysis of the Interest Group Hypothesis
George Mason University WP No. 98.03
Posted: 23 Apr 1998
Date Written: 1998
Abstract
Conventional wisdom has it that the Clayton Act of 1914 was enacted as a replacement for the Sherman Antitrust Act of 1890: as markets found a way of circumventing the antitrust Act, the story goes, monopolies and trusts began to develop again at the beginning of the century, making it necessary to revise the law. A second hypothesis asserts that since the Clayton Act redistributed welfare among different groups in the economy, interest groups influenced politicians' vote on the passage of the Act. In this paper, we investigate whether these assertions can be empirically confirmed by estimating a political voting model of the passing of the Clayton Act. We also use stock market data to investigate which interest group was affected the most by this legislation during its gestation period.
JEL Classification: H1
Suggested Citation: Suggested Citation