Document Type

Working Paper

Publication Date

7-29-2014

Working Paper Number

WP #13011, May 2013 revised July 2014

Abstract

Food safety standards have proliferated as multilateral and bilateral trade agreements constrain traditional barriers to agricultural trade. Stringent food standards can be driven by rising consumer and public concern about food safety and other social objectives, or by the lobbying efforts from domestic industries in agriculture. We investigate the economic and political determinants of the maximum residue limits (MRLs) on pesticides and veterinary drugs. Using a political economy framework and econometric investigation, we find that nations with higher income and larger population adopt stricter MRLs. We also find that countries set more stringent MRLs in their more competitive sectors. Moreover, we show that MRLs and import tariffs are policy substitutes for policy makers. Finally, we find that countries with higher regulatory quality set tougher food standards.

JEL Classification

Q17, Q18, F13

File Format

application/pdf

Length

30 pages

File Function

This revision: July 2014 (First draft: May 2013). Updated analysis with further robustness checks. Added author Dr. Bo Xiong.

Included in

Economics Commons

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