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Compliance with the private standards and capacity building of national institutions under globalization: new agendas for developing countries?

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  • Iizuka, Michiko

    ()
    (UNU-MERIT)

  • Borbon-Galvez, Yari

    ()
    (SPRU, University of Sussex)

Abstract

There are two assumptions regarding regulatory instruments under the globalizing economy. These are: (1) increasing role of private standards in shaping the economic activities of developing countries; and (2) diminishing role of national institutions in "open" and "liberal" markets. In other words it was considered that global private standards would eventually replace already weak or absent national and local institutions in developing countries. The purpose of our paper is to suggest an alternative interpretation to this widely held view about national regulations and institutions in developing countries under the "new standard regime" in the food and agricultural sector where the regulatory framework is traditionally stronger at national level. The role of national regulatory institutions is considered to diminish as the countries compete in the "open" and "liberal" global market since firms are obliged to comply with global private standards. Instead, we have observed cases in developing countries which demonstrate an opposite phenomenon. In these cases, the local and national institutional capacity had actually being enhanced through learning in the "open" and "liberal" market at global level. In other words, we discovered that while the global (private) standards intend to control and shape the economic activities in developing countries through value chains, the local institutions also were transformed in a co-evolutionary manner to sustain the viability of existing local economic activities. This paper hence tries to illustrate our argument with cases from developing countries to demonstrate how the process of adapting to survive in the "new regime" compliance to global (private) standards may have positive impacts on national and local institutions. Moreover, we intend to highlight some common features of transitions which are taking place in regulatory frameworks within the context of a global "new standards regime" (public-private regulations). We will discuss the following cases of standards compliance and their impacts on enhancement of national and local capabilities: (1) the salmon farming industry in Chile, (2) and the fresh agricultural products in Mexico. These cases illustrate the complex interactions between global standards (both private and public-private) and national and local institutions. As the cases are slightly different, the comparison brings about interesting dimensions in illustrating institutional capacity building "trajectories" from both private and non-private standards.

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Bibliographic Info

Paper provided by United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT) in its series MERIT Working Papers with number 025.

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Date of creation: 2009
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Handle: RePEc:unm:unumer:2009025

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Related research

Keywords: Standards; Role of National Institutions; Capacity Building; Latin America; Agri-food;

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References

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  1. Reardon, Thomas & Codron, Jean-Marie & Busch, Lawrence & Bingen, R. James & Harris, Craig, 1999. "Global Change In Agrifood Grades And Standards: Agribusiness Strategic Responses In Developing Countries," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IAMA), vol. 2(03/04).
  2. Giovannucci, Daniele & Ponte, Stefano, 2005. "Standards as a new form of social contract? Sustainability initiatives in the coffee industry," Food Policy, Elsevier, vol. 30(3), pages 284-301, June.
  3. Laurian J. Unnevehr & Helen H. Jensen, 1996. "HACCP as a Regulatory Innovation to Improve Food Safety in the Meat Industry," Center for Agricultural and Rural Development (CARD) Publications 96-wp152, Center for Agricultural and Rural Development (CARD) at Iowa State University.
  4. Perez-Aleman, Paola, 2000. "Learning, Adjustment and Economic Development: Transforming Firms, The State and Associations in Chile," World Development, Elsevier, vol. 28(1), pages 41-55, January.
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  7. Mario Cimoli & Jorge Katz, 2003. "Structural reforms, technological gaps and economic development: a Latin American perspective," Industrial and Corporate Change, Oxford University Press, vol. 12(2), pages 387-411, April.
  8. Robert J. Jensen & Gabriel Szulanski, 2007. "Template Use and the Effectiveness of Knowledge Transfer," Management Science, INFORMS, vol. 53(11), pages 1716-1730, November.
  9. Joseph Stiglitz, 2003. "Globalization and the economic role of the state in the new millennium," Industrial and Corporate Change, Oxford University Press, vol. 12(1), pages 3-26, February.
  10. Fulponi, Linda, 2006. "Private voluntary standards in the food system: The perspective of major food retailers in OECD countries," Food Policy, Elsevier, vol. 31(1), pages 1-13, February.
  11. Michiko Iizuka, 2009. "Standards as a platform for innovation and learning in the global economy: a case study of the Chilean salmon farming industry," International Journal of Technological Learning, Innovation and Development, Inderscience Enterprises Ltd, vol. 2(4), pages 274-293.
  12. Paola Perez-Aleman, 2005. "CLUSTER formation, institutions and learning: the emergence of clusters and development in Chile," Industrial and Corporate Change, Oxford University Press, vol. 14(4), pages 651-677, August.
  13. C. Dolan & J. Humphrey, 2000. "Governance and Trade in Fresh Vegetables: The Impact of UK Supermarkets on the African Horticulture Industry," Journal of Development Studies, Taylor & Francis Journals, vol. 37(2), pages 147-176.
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Cited by:
  1. Terheggen, Anne, 2010. "The new kid in the forest: the impact of China's resource demand on Gabon's tropical timber value chain," MPRA Paper 37982, University Library of Munich, Germany.

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