Trade and Markets Regulation

By Gaëlle Balineau

© Didier Gentilhomme for AFD
© Didier Gentilhomme for AFD

Technological advances in information, both in terms of information and data production (geo-traceability, climate information, satellite data, “big data”) and their transmission (Internet and social networks, mobile applications) considerably extend the possibilities of improving information systems in developing countries. This improvement involves many issues:

  • Allowing consumers and producers to make informed choices in terms of the quality of food and drugs for the first, for example, and production choices depending on information on the markets and demand, or the choice of the production techniques most suited to climate information, for the second.
  • Having reliable and regular information is an essential requirement to allow certain markets to emerge and function efficiently (markets for credit, insurance and reinsurance, for example).
  • Improving decision-support systems is crucial to the effectiveness of most public policies: preventing and managing food crisis situations requires having a reliable and regular information system on prices, production and consumption; an automated customs information system can increase both public revenues and the confidence of foreign investors, etc.

However, increasing the amount of data, the exponential growth in the flow of available information and the proliferation of means to communicate this information is not enough to improve its utility for consumers, producers and public authorities: What information must be produced for what analyses? What information can we have confidence in, who must produce it, have ownership of it? To support the scaling up of information systems, which technological innovations point towards, and therefore donors’ actions in this field, it is important to understand the information requirements of different countries and sectors, the various issues involved in producing these data (intellectual priority versus public good), as well as those raised by the question of harmonizing certain information systems and, finally, the way in which the confidence that the various users (consumers, producers, governments) have in this information is built.

 

Trusted goods, labels and certifications

The growing complexity of production and trade systems, which is related at the same time to technological advances, the globalization of trade and the increasing demands of consumers, places the issue of confidence at the center of consumption patterns. Indeed, consumer demand increasingly concerns characteristics which are impossible for them to verify themselves: compliance of a drug, environmental quality of a food product, health security, but also the effectiveness of an insurance contract… what these characteristics all have in common is that it is difficult for consumers to verify them prior to making their purchase (of the good, service or contract). Consequently, they must trust… the seller, expert, guarantee system or government. The way in which quality signals are built and managed depends on both the effectiveness and cost of the system, which may (or not) be borne by developing countries.

Research on this theme focuses on the effectiveness of labels and certification systems, especially in relation to their modes of governance, as well as on the equity and feasibility of these systems for developing countries.
 

Last update in December 2014

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