Towards the Emergence of Constitutive Rules for Equitable Agribusiness Value Chains

Agribusiness value chains in developing countries have experienced the impact of a double State reform process. The first generation of reforms imposed through the Washington Consensus aimed at economic stabilization, reduction of State budget deficits, and removal of trade barriers. The second generation focuses more on institution building in particular the creation of effective and independent regulatory agencies. This process puts institutional change in the foreground and therefore faces the resistance of entrenched vested interests. This paper develops the concept of quaternary institutions, that is, constitutive institutions for governance and discusses the conditions of emergence of new co-ordination rules in agribusiness value chains in developing countries that favour the inclusion of smallholders and less powerful stakeholders. A brief review of relevant concepts in institutional economics is conducted to clarify the role, the forms and the functions of these institutions. It leads to paying special attention to information generation and sharing as a crucial factor of institutional change. The role diverse actors such as the State, private organisations and external bodies can play in the emergence of quaternary institutions is then highlighted.