Moderating effect of traceability on value chain governance of credence goods: a perspective of the New Institutional Economics framework

Gachukia, Martin Kang’ethe

Studies in Agricultural Economics, 2015, vol. 117, issue 2, 9

Abstract: This paper reviews the application of New Institutional Economics (NIE) theoretical assumptions and the way they relate to value chain governance and are moderated by traceability and information technology. Through literature review, NIE assumptions are examined by comparing how they are partially mitigated by traceability. The effect of these mitigations is realised in the readjustment of value chain governance typologies to suit lean and more competitive and visible value chains. The findings are based on the fact that information asymmetry, bounded rationality and behavioural uncertainty have given rise to incomplete contracts, especially in the agricultural sectors of most developing economies. Supply chain actors in this sector have the constant burden of assurance in ascertaining that credence goods remain authentically safe. The moderating effect of traceability is therefore proposed to reduce these uncertainties and is as such a form of assurance to promote both a holistic approach in compliance with standards and a seamless mechanism for product and process integration. However, this moderating effect, despite being novel in the value chain governance discourse, needs to be empirically ascertained. The novelty of this paper is based on the agricultural development agenda of developing economies in the light of the discourse on market-oriented reforms, following multilateral trade liberalisation and especially structural adjustment programmes in developing countries. The consequent increase in world market integration has led to the promotion of value chain strategies and reconsideration of how food is governed in these markets.

Keywords: Agribusiness; Agricultural and Food Policy; Agricultural Finance; Demand and Price Analysis; Financial Economics; Food Consumption/Nutrition/Food Safety; Food Security and Poverty; Institutional and Behavioral Economics; International Relations/Trade; Land Economics/Use; Marketing; Political Economy; Production Economics (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/208885/files/1513-kang_ethe.pdf (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:ags:stagec:208885

DOI: 10.22004/ag.econ.208885

Access Statistics for this article

More articles in Studies in Agricultural Economics from Research Institute for Agricultural Economics Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().