The Efficacy of Private Voluntary Certification Schemes: A Governance Costs Approach

Thomas Dietz () and Jennie Auffenberg ()
Additional contact information
Thomas Dietz: University of Muenster - Institute of Political Science & ZenTra
Jennie Auffenberg: University of Bremen - Institute for Commercial Law & ZenTra

No 39 / 2014, ZenTra Working Papers in Transnational Studies from ZenTra - Center for Transnational Studies

Abstract: What are the conditions under which private, voluntary certification programs like the Rainforest Alliance or Fairtrade can successfully promote environmental and social standards? We propose that the efficacy of a certification program depends on three variables: its sustainability standards, enforcement mechanisms and its market proliferation. The stricter the standards, the better the enforcement systems and the bigger the market share, the higher will be the factual impact of a particular certification program. We develop an index to systematically compare the strengths of norms and enforcement systems across a selection of important certification schemes in the global coffee industry and collect data about their market shares. We use a qualitative comparative analysis (QCA) to analyze these data. Our results show: certification schemes with strict standards and enforcement systems possess only insignificant market shares. Certification schemes with more significant market shares have either loose standards and/or ineffective enforcement systems. We develop a governance costs approach to explain these findings. Stricter standards and enforcement systems lead to an increase of production costs. The extents to which these costs can be shifted to the market are limited. Certification schemes therefore have incentives to reduce these costs in order to increase their market shares. The results confirm that the capacity of voluntary governance schemes is systematically restricted.

Keywords: corporate social responsibility; sustainability; global value chains; transnational regulation; qualitative comparative analysis (search for similar items in EconPapers)
JEL-codes: J50 K33 L51 M14 Q20 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2014-10
New Economics Papers: this item is included in nep-env, nep-law and nep-reg
References: Add references at CitEc
Citations:

Downloads: (external link)
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2513254 Current version, 2014 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zen:wpaper:39

Access Statistics for this paper

More papers in ZenTra Working Papers in Transnational Studies from ZenTra - Center for Transnational Studies Contact information at EDIRC.
Bibliographic data for series maintained by Finn Marten Koerner ( this e-mail address is bad, please contact ).