The Political Economy of Food Standard Determination: International Evidence from Maximum Residue Limits

Abstract

Food safety standards have proliferated as multilateral and bilateral trade agreements constrain traditional barriers to agricultural trade. Stringent food standards can be driven by rising consumer and public concern about food safety and other social objectives, or by the lobbying efforts from domestic industries in agriculture. We investigate the economic and political determinants of the maximum residue limits (MRLs) on pesticides and veterinary drugs. Using a political economy framework and econometric investigation, we find that nations with higher income and larger population adopt stricter MRLs. We also find that countries set more stringent MRLs in their more competitive sectors. Moreover, we show that MRLs and import tariffs are policy substitutes for policy makers. Finally, we find that countries with higher regulatory quality set tougher food standards. Abstract: Food safety standards have proliferated as multilateral and bilateral trade agreements constrain traditional barriers to agricultural trade. Stringent food standards can be driven by rising consumer and public concern about food safety and other social objectives, or by the lobbying efforts from domestic industries in agriculture. We investigate the economic and political determinants of the maximum residue limits (MRLs) on pesticides and veterinary drugs. Using a political economy framework and econometric investigation, we find that nations with higher income and larger population adopt stricter MRLs. We also find that countries set more stringent MRLs in their more competitive sectors. Moreover, we show that MRLs and import tariffs are policy substitutes for policy makers. Finally, we find that countries with higher regulatory quality set tougher food standards. THE POLITICAL ECONOMY OF FOOD STANDARD DETERMINATION: INTERNATIONAL EVIDENCE FROM MAXIMUM RESIDUE LIMITS

Analyzing Trade Liberalization Effects in the Egg Sector Using a Dynamic Gravity Model

“…As with those of Kandilov and Zheng (), our results indicate that the negative impact of sunk costs on the probability of export market participation is higher when the destination market is a developed country. This result confirms our expectation that nations with higher incomes adopt stricter regulation (Li et al ).…”

“…The reason could be greater product standards over time due to consumer preferences regarding agri‐food products, especially in developed countries. Looi Kee et al () as well as Li et al () offer another potential explanation, which is that policy makers adopt more stringent regulation as tariffs are reduced by various trade agreements.…”

Trade restriction rationale for food safety implementation: Evidence from Southeast Asian Countries

“…Following this framework, a number of studies are undertaken to analyze trade policy measures, both tariffs and NTMs. Among them are widely recognized works carried out by Pincus (1975), Caves (1976), Ray (1981), Lavergne (1983), Baldwin (1985Baldwin ( , 1989), Anderson and Baldwin (1987), Li, Xiong, and Beghin (2014), and Herghelegiu (2018).…”

“…Three decades later, the pattern of trade policy determinants changes considerably. More recently, to examine a range of the economic and political determinants of MRLs, a political economy framework together with an econometric analysis is employed in Li et al (2014). It is found that countries with higher income and larger population implement stricter MRLs.…”

Front Matter

“…The application looks at the US shrimp market. The last manuscript in the protectionism section is unpublished and written with Bo Xiong and Yuan Li (Li, Xiong, and Beghin, 2014). It looks at the political economic determination of food standards using panel data on MRLs across countries and agricultural markets.…”