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A Theory of Standards-Driven Rural Development

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  • Johan F.M. Swinnen
  • Scott Rozelle
  • Tao Xiang
  • Thijs Vandemoortele

Abstract

Consumers have increasing demands for product standards. This has important implications for development. This paper develops a formal theory of the process of the introduction of high product standards in developing countries. The model endogenizes the introduction of high standards. Initial differences in income, the nature of capital constraints and transaction costs, the initial production structure and policies and institutions are shown to affect the likelihood of and the size of the high standards economy. Initial differences in some of these same factors-as well as inter-country differences in the distribution of the sizes of farmers-are also shown to determine which producers are included, and which not.

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Bibliographic Info

Paper provided by LICOS - Centre for Institutions and Economic Performance, KU Leuven in its series LICOS Discussion Papers with number 19908.

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Date of creation: 2008
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Handle: RePEc:lic:licosd:19908

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  1. Jaskold Gabszewicz, J. & Thisse, J. -F., 1979. "Price competition, quality and income disparities," Journal of Economic Theory, Elsevier, vol. 20(3), pages 340-359, June.
  2. Aksoy, M. Ataman & Beghin, John C., 2005. "Global Agricultural Trade and Developing Countries," Staff General Research Papers 12228, Iowa State University, Department of Economics.
  3. Marcoul, Philippe & Veyssiere, Luc, 2008. "A Financial Contracting Approach to the Role of Supermarkets in Farmers' Credit Access," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6366, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  4. Maertens, Miet & Colen, Liesbeth & Swinnen, Johan F.M., 2009. "Globalization and Poverty in Senegal: A Worst Case Scenario?," 2009 Conference, August 16-22, 2009, Beijing, China 51668, International Association of Agricultural Economists.
  5. Anderson, Kym & Damania, Richard & Jackson, Lee Ann, 2004. "Trade Standards and the Political Economy of Genetically Modified Food," CEPR Discussion Papers 4526, C.E.P.R. Discussion Papers.
  6. Elizabeth M. M. Q. Farina & Thomas Reardon, 2000. "Agrifood Grades and Standards in the Extended Mercosur: Their Role in the Changing Agrifood System," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(5), pages 1170-1176.
  7. Maertens, Miet & Swinnen, Johan F.M., 2007. "Trade, Standards and Poverty. Evidence from Senegal," 106th Seminar, October 25-27, 2007, Montpellier, France 7924, European Association of Agricultural Economists.
  8. Swinnen, Johan F.M. & Vandemoortele, Thijs, 2008. "The Political Economy of Nutrition and Health Standards in Food Markets," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44364, European Association of Agricultural Economists.
  9. Bruce Gardner, 2003. "U.S. Food Quality Standards: Fix for Market Failure or Costly Anachronism?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(3), pages 725-730.
  10. Johan F.M. Swinnen & Anneleen Vandeplas, 2007. "Vertical coordination, rent distribution, and development," LICOS Discussion Papers 18407, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  11. Dave Weatherspoon & Joyce Cacho & Ralph Christy, 2001. "Linking Globalization, Economic Growth and Poverty: Impacts of Agribusiness Strategies on Sub-Saharan Africa," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(3), pages 722-729.
  12. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716.
  13. Unnevehr, Laurian J., 2000. "Food safety issues and fresh food product exports from LDCs," Agricultural Economics, Blackwell, vol. 23(3), pages 231-240, September.
  14. Brian Roe & Ian Sheldon, 2007. "Credence Good Labeling: The Efficiency and Distributional Implications of Several Policy Approaches," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(4), pages 1020-1033.
  15. Thomas Reardon & C. Peter Timmer & Christopher B. Barrett & Julio Berdegué, 2003. "The Rise of Supermarkets in Africa, Asia, and Latin America," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(5), pages 1140-1146.
  16. Winnie Mitullah, 2000. "Food Safety Requirements and Food Exports from Developing Countries: The Case of Fish Exports from Kenya to the European Union," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(5), pages 1159-1169.
  17. Minot, Nicholas & Ngigi, Margaret, 2004. "Are horticultural exports a replicable success story?," MTID discussion papers 73, International Food Policy Research Institute (IFPRI).
  18. Daniel Pick, 2008. "Geographical Indications and the Competitive Provision of Quality in Agricultural Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(3), pages 794-812.
  19. Ronald Fischer & Pablo Serra, 1998. "Standards and Protection," Documentos de Trabajo 45, Centro de Economía Aplicada, Universidad de Chile.
  20. Ellickson, Paul B., 2006. "Quality competition in retailing: A structural analysis," International Journal of Industrial Organization, Elsevier, vol. 24(3), pages 521-540, May.
  21. Murray Fulton & Konstantinos Giannakas, 2004. "Inserting GM Products into the Food Chain: The Market and Welfare Effects of Different Labeling and Regulatory Regimes," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(1), pages 42-60.
  22. A. Michael Spence, 1975. "Monopoly, Quality, and Regulation," Bell Journal of Economics, The RAND Corporation, vol. 6(2), pages 417-429, Autumn.
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Citations

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Cited by:
  1. Swinnen Johan & Vandeplas Anneleen, 2012. "Rich Consumers and Poor Producers: Quality and Rent Distribution in Global Value Chains," Journal of Globalization and Development, De Gruyter, vol. 2(2), pages 1-30, January.
  2. Minten, Bart & Singh, K.M. & Sutradhar, Rajib, 2011. "Branding in food retail of high value crops in Asia: Case of Makhana from Bihar (India)," MPRA Paper 54349, University Library of Munich, Germany, revised 31 Jan 2011.
  3. Xiang, Tao & Huang, Jikun & Kancs, d'Artis & Swinnen, Johan F.M., 2009. "Standards Driven Rural Development: A General Equilibrium Model with Market Imperfections," 2009 Conference, August 16-22, 2009, Beijing, China 51476, International Association of Agricultural Economists.
  4. Minten, Bart & Reardon, Thomas & Vandeplas, Anneleen, 2009. "Linking urban consumers and rural farmers in India: A comparison of traditional and modern food supply chains," IFPRI discussion papers 883, International Food Policy Research Institute (IFPRI).
  5. Liang, Qiao & Hendrikse, George W. J. & Huang, Zuhui, 2010. "Quality provision and governance structure variety: Pooling versus double markup," IAMO Forum 2010: Institutions in Transition – Challenges for New Modes of Governance 52694, Leib­niz Institute of Agricultural Development in Central and Eastern Europe (IAMO).
  6. Bignebat, C. & Vagneron, I., 2011. "Cross-border coordination in the Madagascar-EU lychee chain: the role of GlobalGAP," Working Papers MOISA 201106, UMR MOISA : Marchés, Organisations, Institutions et Stratégies d'Acteurs : CIHEAM-IAMM, CIRAD, INRA, Montpellier SupAgro, IRD - Montpellier, France.
  7. Minten, Bart & Singh, K.M. & Sutradhar, Rajib, 2011. "The rapid emergence of branding in food retail in Asia: Insights from Bihar (India)," MPRA Paper 54337, University Library of Munich, Germany, revised 14 Jan 2011.
  8. Minten, Bart & Singh, K.M. & Sutradhar, Rajib, 2010. "The makhana value chain and the fast emergence of branding in food retail: Evidence from Bihar (India)," MPRA Paper 54344, University Library of Munich, Germany, revised 14 Jan 2010.

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