The Strategic Use of Transnational Private Standards: Strengthening or Weakening Government Regulation?
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Over the past two decades, transnational private standards such as “dolphin-safe,” “fair-trade,” and “sustainably produced timber,” have become ubiquitous. The regulatory landscape of many issue areas includes a mix of these private standards and government regulation. This is puzzling as firms adopting these standards voluntarily commit to exceeding government regulation, yet may not recoup the additional costs related to production changes and certification of their processes. To understand why firms adopt transnational private standards and how these standards affect government policies, this dissertation examines how the adoption of sustainable forestry standards changed the regulatory dynamics between firms and governments between 1997 and 2016. The dissertation consists of three analyses of the interaction between standards’ adoption and government regulation. The first study quantitatively evaluates forest sector policies in 38 countries, and demonstrates that whether industries use their adoption of transnational private standards to gain competitive advantages over foreign rivals, or alternatively, to avert further government regulation depends on market conditions and the willingness of consumers to pay a premium for certification. The second study investigates the extent to which to which governments in Australia, Canada, and the United Kingdom have included transnational private standards in regulation to provide producers in import-competing industries competitive benefits over foreign producers. It establishes that in most cases, governments calibrated forest sector policies to increase trade benefits in response to the trade orientation of sectors and their level of transnational private standards adoption. The third study examines lobbying across industries and finds that industries adopted lobbying strategies on different forest sector policies based on whether those policies would improve their competitiveness and the extent to which to which they believed they could influence government policy. In aggregate, these studies demonstrate that governments of more-developed countries incorporated transnational private standards into their forest sector policies to the extent that doing so would provide economic benefits to their industries, and that they did so due to corporate lobbying.