Also known as: beggar thy neighbor policy · beggar-thy-neighbour policy · beggar thy neighbour policy · beggar-thy-neighbor · protectionism
Written by attorneys · grounded in primary & secondary sources — see below
An economic policy by which a state restricts exports of local resources or otherwise discriminates against out-of-state buyers to reserve benefits for in-state interests. The policy constitutes impermissible economic protectionism under the dormant Commerce Clause when it facially favors local purchasers or processors over interstate competitors.
The state of Maine enacts a statute prohibiting the export of live baitfish harvested within its borders. An out-of-state distributor seeks to purchase the fish for resale in neighboring states but is blocked by state officials. The distributor sues, arguing the ban reserves the resource exclusively for local buyers and thereby discriminates against interstate commerce.
A state permits only in-state wineries to ship wine directly to consumers while requiring out-of-state wineries to route all sales through local wholesalers. An out-of-state winery sues after its direct-shipment applications are denied. The suit claims the scheme protects local producers from out-of-state competition in violation of the dormant Commerce Clause.
Select any source to read its text and confirm it supports the definition.
A county adopts an ordinance directing all construction debris to a government-owned recovery facility and barring haulers from using private out-of-state processors. A regional trade group challenges the rule as discriminatory. The ordinance survives because it favors a public provider performing a traditional government function rather than private economic interests.
Oklahoma prohibits the export of minnows caught in state waters to preserve supply for local bait shops. An out-of-state buyer is denied a shipment and sues. The restriction is struck down as classic economic protectionism that reserves a local natural resource for in-state purchasers.
South Dakota operates a state-owned cement plant and sells output only to in-state contractors at favorable prices. An out-of-state construction firm is refused supply and sues. The policy is upheld because the state is acting as a market participant rather than regulating private commerce.
New Jersey bars the importation of solid waste from out-of-state sources to preserve landfill capacity for local municipalities. Philadelphia-area haulers challenge the ban after their shipments are turned away. The prohibition is invalidated as economic protectionism that discriminates against interstate commerce in a common article of trade.
A beggar-thy-neighbor policy explicitly reserves local resources or market access for in-state interests by blocking exports or imposing origin-based burdens. Permissible regulation applies evenhandedly to in-state and out-of-state actors or advances a non-protectionist goal such as health or safety without reasonable nondiscriminatory alternatives.
The doctrine protects a state when it acts as a buyer or seller in the market and favors its own citizens in those proprietary transactions. It does not shield rules that regulate private parties or impose downstream conditions on goods after title passes.
A state must prove the ban serves a legitimate non-economic interest such as preventing ecological harm and that no reasonable nondiscriminatory alternative exists. Mere desire to reserve resources for local economic benefit never suffices.
…isolation.’ ” The opinions of the Court through the years have reflected an alertness to the evils of “economic isolation” and protectionism, while at the same time recognizing that incidental burdens on interstate commerce may be unavoidable when a State legislates to safeguard the health and safety of its people. Thus, where…