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The political economy of geographical indications

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  • Koen Deconinck
  • Martijn Huysmans
  • Jo Swinnen

Abstract

In this article we study the political process that governs the creation and size of new Geographical Indications (GIs). Producers can choose to apply for a GI and subsequently go through a bargaining process with the government. We derive the optimal GI area from the point of view of consumers, producers, social welfare, and the government; and we show how bargaining leads to a GI size in between the applicant’s optimum and the government’s optimum. Under the assumption that the non-GI good is a commodity, any GI implemented through the political process is welfare-enhancing, but not all welfare-enhancing GIs will be proposed by producers.

Suggested Citation

  • Koen Deconinck & Martijn Huysmans & Jo Swinnen, 2015. "The political economy of geographical indications," Working Papers of Department of Economics, Leuven 509755, KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven.
    • Handle: RePEc:ete:ceswps:509755
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