Fostering compliance with voluntary sustainability standards through institutional design: An analytic framework and empirical application

The institutional design of voluntary sustainability standards (VSS) has been recognized as an important determinant of compliance with VSS rules, which partly explains heterogeneity in VSS sustainability impacts. However, the current understanding of how VSS institutional design generates compliance is scattered and lacks systematic operationalization. This paper brings together different strands of literature and identifies three main mechanisms through which VSS institutional design can generate compliance: enforcement, market incentives, and capacity‐building. We propose an integrated analytic framework that operationalizes these mechanisms into specific, identifiable design attributes. We apply it in an empirical analysis of 13 agrifood and forestry VSS to assess the extent to which these mechanisms are used in VSS institutional design. While enforcement appears necessary for VSS to operate, we find heterogeneity in how these mechanisms are used and combine, which is partly explained by contextual factors. This provides avenues for analyzing their respective effectiveness in generating compliance.