Reputation Matters: Spillover Effects in the Enforcement of US SPS Measures

LICOS Discussion Paper Series No. 302/2011

38 Pages Posted: 30 Jan 2012 Last revised: 31 Jan 2012

See all articles by Marie Agnes Jouanjean

Marie Agnes Jouanjean

Groupe d'Economie Mondiale (GEM) - IEP Paris

Jean-Christophe Maur

World Bank

Ben Shepherd

World Bank - Development Research Group (DECRG); Groupe d'Economie Mondiale (GEM) - IEP Paris

Multiple version iconThere are 2 versions of this paper

Date Written: December 7, 2011

Abstract

This paper uses a novel dataset on US food import refusals to show that reputation is an important factor in the enforcement of sanitary and phyto-sanitary (SPS) measures. The strongest reputation effect comes from a country’s own history of compliance in relation to a particular product. The odds of at least one import refusal in the current year increase by over 300% if there was a refusal in the preceding year, after controlling for other factors. However, the data are also suggestive of the existence of two sets of spillovers. First, import refusals are less likely if there is an established history of compliance in relation to other goods in the same sector. Second, an established history of compliance in relation to the same product by neighboring countries also helps reduce the number of import refusals. These findings have important policy implications for exporters of agricultural products, particularly in middle-income countries. In particular, they highlight the importance of a comprehensive approach to upgrading standards systems, focusing on sectors rather than individual products, as well as the possible benefits that can come from regional cooperation in building SPS compliance capacity.

Keywords: product standards, SPS measures, import refusals, developing countries

JEL Classification: F13, F15, O24

Suggested Citation

Jouanjean, Marie Agnes and Maur, Jean-Christophe and Shepherd, Ben, Reputation Matters: Spillover Effects in the Enforcement of US SPS Measures (December 7, 2011). LICOS Discussion Paper Series No. 302/2011, Available at SSRN: https://ssrn.com/abstract=1995500 or http://dx.doi.org/10.2139/ssrn.1995500

Marie Agnes Jouanjean

Groupe d'Economie Mondiale (GEM) - IEP Paris ( email )

Paris, 75006
France

Jean-Christophe Maur

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

HOME PAGE: http://www.worldbank.org/trade

Ben Shepherd (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

1818 H Street NW
MSN3-311
Washington, DC 20433
United States

Groupe d'Economie Mondiale (GEM) - IEP Paris ( email )

197 Boulevard Saint-Germain
Paris, 75007
France

HOME PAGE: http://gem.sciences-po.fr/

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