This article presents a political economy model of public standards in an open economy. We use the model to derive the political optimum and to analyse different factors that have an influence on this political equilibrium. We analyse the relationship between trade and the political equilibria and compare the political outcome with the social optimum to identify under which cases political considerations lead to standards being set 'too low' or 'too high', and which standards could be labelled as protectionist measures.
Over the past decades, the world has witnessed an unprecedented growth in global value chains, propelled by increasingly demanding quality standards. These trends lead to concerns about the impact of value chains on development and poverty and about the possible protectionist nature of quality standards in rich countries. This book offers the first integrated theoretical analysis of the economic and political factors which determine the level of quality standards, as well as their economic effects along the value chain. Using realistic assumptions motivated by empirical research, the theoretical framework in this book makes it possible to study the efficiency effects as well as the distributional consequences of one of the most striking evolutions affecting global trade and development today.
This paper presents a general political economy model of standards. We use the model to derive political and social optima of nutrition and health standards in food markets, and to identify under which cases "understandardization" or "over-standardization" will result. The paper analyses the impact of trade and development on the political equilibrium as well as the role of the media and consumer perceptions.
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AbstractRetailers' 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. This article develops a political economy model that may contribute to explaining this stylized fact. We 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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