Health Protection or Industry Protection: The Endogenous Food Standards

Abstract

This study argued that food standards are endogenous and determined by the contest or balance among five relevant interest groups: industry, government, consumers (civil society), academia, and external influence. After a comprehensive review on the Maximum Residue Limit regulation system around the world, this study carried out an econometric estimation to find out what factors determined the stringency of MRLs.The results show that the stringency of MRLs is majorly determined by good governance and MRLs generally reflect consumer’s demand for higher health protection. The stable government with low corruption and good credibility in its people, which can provide high quality of public, civil services and relevant services, tends to have relax MRLs, while government focusing on formulating and enforcing effective rule of law and implement sound policies to permit and promote private interests (regulatory quality), tends to generate tight MRLs. Net apple importers and net traditional apple exporters tend to impose loose MRLs while countries specified in world food market but not in apple tend to apply stricter MRLs. Consumers in richer countries with free access to information and have great accountability on their government tends to demand more stringent import MRLs. Countries with higher proportion of employers in R&D and more journal publications tend to have more stringent MRLs while more expenditure in R&D tends to generate less stringent MRLs when all other factors controlled. The role of scientific evidence in determining the regulatory stringency could be very complicated. However, this study does not find evidence that MRLs are related to a country's competition environment in the world market or its political importance of agriculture/apple industry or its export-driven strategy.