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Private Regulation and Foreign Conduct

51 Pages Posted: 27 Jul 2010 Last revised: 19 Aug 2010

Adam I. Muchmore

Penn State Law - University Park, PA

Date Written: July 16, 2010

Abstract

Current U.S. policy on safety regulation for imported food is based largely on ex post measures. Several reform proposals seek to strengthen the ex ante component of this regulatory program. These proposals rely on one or more of three basic strategies: direct extraterritorial regulation; delegation of regulatory authority to private entities; and delegation of regulatory authority to foreign government agencies. This paper explores the ability of each strategy to respond to several principal-agent problems relevant to imported-food safety: the regulatory license problem; interest group capture; and the reality of bribery and threats in many food-exporting countries.

Through the lens of these principal-agent problems, delegation to a foreign government agency is the least attractive of the three strategies. The choice between the remaining two strategies is an empirical question on which little data is currently available. To the extent governments wish to experiment with delegation to private entities, they should do so in a limited manner, focusing on specific product categories or regions. The success or failure of these programs could then inform decisions on whether to rely more broadly on delegation to private entities as a regulatory strategy.

Keywords: food, safety, private, regulation, China, import, risk, principal-agent

Suggested Citation

Muchmore, Adam I., Private Regulation and Foreign Conduct (July 16, 2010). San Diego Law Review, Vol. 47, No. 2, 2010; Penn State Legal Studies Research Paper No. 32-2010. Available at SSRN: https://ssrn.com/abstract=1649131

Adam I. Muchmore (Contact Author)

Penn State Law - University Park, PA ( email )

Lewis Katz Building
University Park, PA 16802
United States

HOME PAGE: http://pennstatelaw.psu.edu/faculty/muchmore

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