INSTANT WINNERS - LEGAL CHANGE IN TRANSITION AND THE DIFFUSION OF STATE LOTTERIES

This paper investigates the determinants of legal change in a public c hoice framework. An empirical model explaining the timing and probabil ity of decisions to adopt state-operated lotteries is developed. Emplo ying a Tobit estimator and explicitly considering the effects of state -specific constitutional and political structures, spending and tax po licies, and federal revenue importation, evidence is presented showing that legal change is much like economic change: Lotteries are more li kely to be adopted and to be adopted earlier where the costs are lowes t relative to expected benefits. State legislatures appear to be the m ain beneficiaries of this public choice process.