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Standards as a new form of social contract? Sustainability initiatives in the coffee industry

"In the former age of national capitalism, the achievement of market fairness was embedded in a normative framework generated by government, labor unions, and perhaps religious authority. In the current age of global capitalism, new actors such as NGOs, industry associations and public–private partnerships provide the normative framework that corporations use for social legitimacy. In this context, standard-setting processes operate as new forms of social contract where the state, rather than being directly involved between the parties, provides a form of basic guarantee while (more or less accountable) NGOs and firms are in charge of hammering out the bargains. This article examines the dynamics of this new configuration through the case study of sustainability initiatives in the coffee sector. It addresses four questions: (1) Are these standards effective in communicating information and creating new markets? (2) To what extent do they embed elements of collective and private interests? (3) Is sustainability content actually delivered to their intended beneficiaries? and (4) What is the role of public policy in addressing their shortcomings?"
Daniele Giovannucci, Stefano Ponte
World Bank, Danish Institute for International Studies
Industry Focus: 
Food & Agriculture
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