Governmental versus self-regulation of derivative markets: examining the U.S. and Brazilian experience

Ethical trade: issues in the regulation of global supply chains

“…Those countries lacked the capacities to effectively develop or apply regulations. These and related weaknesses led to various shortcomings in implementation (Khanna 2001, Lazzarini & de Mello 2001 forthcoming):…”

“…As mandatory state regulation fell out of favour as a way of addressing globalisation and its discontents, what should be done? In the 1990s, two main answers were given (Lazzarini & de Mello 2001, Cawthorne 2002.…”

“…A comparative picture depends on what one compares this to. Some argue that ARMs present lower costs (and lower achievements) than state regulation but this assumes a feasibility, perfection and separation of state regulation that may well not exist in practice (Lazzarini & de Mello 2001).…”

“…Institution-focused analysis provides a deeper critique that sees more inherent -and resilient -challenges to ethical trade. This understands the "6E" shortfalls as a failure to close the gap between public and private interests, leading to negative public externalities of private actions and an inability of private firms to internalise the public benefits of socially and environmentally beneficial actions (Lazzarini & de Mello 2001). It models those interests as shown in Figure 4.…”

“…Data on consumer willingness to pay a price premium for perceived ethical products is mixed, but at the pessimistic end lies work cited by Jenkins (2001) indicating that only 5% of Canadian consumers would pay more for fair-traded products. The result -when motivation and willingness to pay are added to factors like brand loyalty, switching costs, lack of alternative products, and information asymmetries -is that consumers will generally not switch in large numbers from goods that rank poorly on ethical criteria to goods that rank well (Lazzarini & de Mello 2001). Only where consumers form a large demand bloc (such as major institutions) does the power of competition and the market start to work more effectively, providing the intended driving force for ethical trade.…”