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When are Private Standards more Stringent then Public Standards?

  • Thijs Vandemoortele

Retailers’ private standards are increasingly important in addressing consumer concerns about safety, quality and social and environmental issues. Empirical evidence shows that these private standards are frequently more stringent than their public counterparts. I develop a political economy model that may contribute to explaining this stylized fact. I show that if producers exercise their political power to persuade the government to impose a lower public standard, retailers may apply their market power to install a private standard at a higher level than the public one, depending on several factors.

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Paper provided by LICOS - Centre for Institutions and Economic Performance, KU Leuven in its series LICOS Discussion Papers with number 29611.

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Date of creation: 2011
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Handle: RePEc:lic:licosd:29611
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  1. Johan F.M. Swinnen & Thijs Vandemoortele, 2008. "The Political Economy of Nutrition and Health Standards in Food Markets ," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 30(3), pages 460-468.
  2. Jill J. McCluskey & Jason A. Winfree, 2009. "Pre-empting public regulation with private food quality standards," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 36(4), pages 525-539, December.
  3. Lutz, Stefan & Lyon, Thomas P & Maxwell, John W, 2000. "Quality Leadership When Regulatory Standards Are Forthcoming," Journal of Industrial Economics, Wiley Blackwell, vol. 48(3), pages 331-48, September.
  4. Stefanie Kirchhoff, 2000. "Green Business and Blue Angels," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 15(4), pages 403-420, April.
  5. Johan F.M. Swinnen & Thijs Vandemoortele, 2009. "Are food safety standards different from other food standards? A political economy perspective," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 36(4), pages 507-523, December.
  6. Arora, Seema & Gangopadhyay, Shubhashis, 1995. "Toward a theoretical model of voluntary overcompliance," Journal of Economic Behavior & Organization, Elsevier, vol. 28(3), pages 289-309, December.
  7. Henson, Spencer J. & Hooker, Neal H., 2001. "Private Sector Management Of Food Safety: Public Regulation And The Role Of Private Controls," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IAMA), vol. 4(01).
  8. John W. Maxwell & Thomas P Lyon & Steven C.. Hackett, 1995. "Self-Regulation and Social Welfare: The Political Economy of Corporate Environmentalism," University of Chicago - George G. Stigler Center for Study of Economy and State 122, Chicago - Center for Study of Economy and State.
  9. Maloney, Michael T & McCormick, Robert E, 1982. "A Positive Theory of Environmental Quality Regulation," Journal of Law and Economics, University of Chicago Press, vol. 25(1), pages 99-123, April.
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