In-transit cold treatment: a case of institutional path dependence
Pasquale Lubello and
Journal of Institutional Economics, 2020, vol. 16, issue 4, 463-479
In-transit cold treatment consists of exposing food commodities – generally fresh agricultural products – to temperatures approaching 0 °C for a variable number of days during shipping in purpose-equipped containers in order to manage the risks of quarantine contamination. In this paper, we show that in-transit cold treatment is frequently required in the international trade of apples potentially affected by Mediterranean fruit fly (Ceratitis Capitata), despite the existence of potentially less costly and equally effective alternative means of applying the same treatment, in particular ‘cold storage’. We then try to understand why these alternative methods do not emerge spontaneously or become more widespread. We suggest that technical aspects and their respective costs are not always the most important factors. Transaction costs may also come into play. In accordance with ‘institutional path dependence’ literature, we suggest that the negotiation costs a country has to bear in order to encourage its trading partners to adopt an alternative treatment are high enough for it to be preferable to continue using the current solution, despite its higher adoption cost.
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Persistent link: https://EconPapers.repec.org/RePEc:cup:jinsec:v:16:y:2020:i:4:p:463-479_7
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