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Co-regulation and voluntarism in the provision of food safety: lessons from institutional economics

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  • Hussain, Salman
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    Abstract

    Traditional regulation in the food safety domain has been in the form of mandatory, inflexible food safety controls that are applied to firms. There has been a trend away from this regulatory paradigm towards more co-regulation and self-regulation by industry. This paper investigates the potential for systemic failure in the provision of safe food that might arise as a consequence of this new regulatory paradigm. These systemic failures occur owing to the fact that the food safety outcome depends on the behaviour of the three sets of agents (firms, consumers and the regulator). These populations of agents have generally been treated in the literature as homogeneous in terms of their behaviour and strategies. Further, the actions taken by any one agent are assumed to be independent of those taken by others. The institutional economics model that is developed assumes heterogeneity and inter-agent strategic interactions. Given this (more realistic) depiction of behaviour, instances of potential regulatory inefficiencies arise . In particular, the model challenges the trend towards voluntarism and self-regulation.

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    File URL: http://purl.umn.edu/45996
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    Bibliographic Info

    Paper provided by Scottish Agricultural College, Land Economy Research Group in its series Working Papers with number 45996.

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    Date of creation: Jul 2006
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    Handle: RePEc:ags:saclwp:45996

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    Web page: http://www.sac.ac.uk/research/lee/
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    Related research

    Keywords: co-regulation; strategic behaviour; food safety; ex ante regulation; institutional economics; Food Consumption/Nutrition/Food Safety; Institutional and Behavioral Economics;

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    1. Peltzman, Sam, 1975. "The Effects of Automobile Safety Regulation," Journal of Political Economy, University of Chicago Press, vol. 83(4), pages 677-725, August.
    2. Julie A. Caswell & Neal H. Hooker, 1996. "HACCP as an International Trade Standard," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(3), pages 775-779.
    3. Buzby, Jean C. & Frenzen, Paul D., 1999. "Food safety and product liability," Food Policy, Elsevier, vol. 24(6), pages 637-651, December.
    4. David A. Hennessy & Jutta Roosen & Helen H. Jensen, 2002. "Systemic Failure in the Provision of Safe Food," Center for Agricultural and Rural Development (CARD) Publications 02-wp299, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    5. Unnevehr, Laurian J. & Jensen, Helen H., 1999. "Economic Implications of Using HACCP As a Food Safety Regulatory Standard (The)," Staff General Research Papers 1631, Iowa State University, Department of Economics.
    6. Shogren, Jason F. & Crocker, Thomas D., 1999. "Risk and Its Consequences," Journal of Environmental Economics and Management, Elsevier, vol. 37(1), pages 44-51, January.
    7. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132.
    8. Nelson, Richard R & Winter, Sidney G, 1977. "Simulation of Schumpeterian Competition," American Economic Review, American Economic Association, vol. 67(1), pages 271-76, February.
    9. Unnevehr, Laurian J. & Jensen, Helen H., 1999. "The economic implications of using HACCP as a food safety regulatory standard," Food Policy, Elsevier, vol. 24(6), pages 625-635, December.
    10. Brian Roe, 2004. "Optimal Sharing of Foodborne Illness Prevention between Consumers and Industry: The Effect of Regulation and Liability," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(2), pages 359-374.
    11. S. Salman Hussain, 2003. "Eco-innovations and industrial organisation: a review of complementary explanations of unsustainable economic paths," International Journal of Agricultural Resources, Governance and Ecology, Inderscience Enterprises Ltd, vol. 2(3/4), pages 243-261.
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