Abstract

The market for kidneys offers a case study of Baptists and Bootleggers. In almost every country, sales are currently illegal and donated organs are allocated by a central planner. Thousands of people die every year, because of the shortage caused by the absence of markets. This paper starts by examining the free-market alternative, and shows that a market would solve the shortage. It then uses gains-from-trade analysis to explain why current vested interests oppose a move to a market, despite the immense potential for saved lives. In a shift to a market, gains from trade would be distributed away from lucky patients and various industries that benefit from the shortage ; these “Bootleggers” form an alliance with “Baptists”.