REGULATEE CHOICE IN CERTIFICATION SCHEMES: EXPLAINING SELECTION FROM AMONG CERTIFIER OPTIONS
| DOI | http://doi.org/10.1111/padm.12302 |
| Date | 01 March 2017 |
| Published date | 01 March 2017 |
doi : 10. 1111/p adm .12302
REGULATEE CHOICE IN CERTIFICATION SCHEMES:
EXPLAINING SELECTION FROM AMONG CERTIFIER
OPTIONS
DAVID P. CARTER
Voluntaryregulatory programmes embody the complex interactions that exist between public orga-
nizations and nongovernmental entities in contemporary public administration. This article draws
attention to ‘regulatee choice’ in certication programmes, in which programme participants choose
from among certier alternatives. In the context of US organic regulation, regulatee choice is exam-
ined through the factors that farmers weigh when selecting from among public, nonprot, and
private certier options. Drawing on a nation-wide survey of organic farmers, regulatee choice
between public, nonprot, and private certiers is found to be differentiated by the importance that
regulatees ascribe to certier reputations and service offerings, as well as regulatee desires to sup-
port the organic movement through certication. Regulatee choice between public and nonprot
certiers is further differentiated by the importance regulatees place on certiers’ perceived regula-
tory expertise. The article discusses explanations for the ndings and the contribution of regulatee
choice research.
INTRODUCTION
Voluntary regulatory programmes embody the complex interactions that exist between
public and nongovernmental entities in contemporary public administration. As gov-
erning arrangements in which participants opt into regulatory oversight in exchange
for access to benecial club goods (Cashore 2002; Potoski and Prakash 2009), such pro-
grammes further reect the general drive towards decentralized, market-based solutions
to environmental and social challenges (Van der Heijden 2015). The variety of structural
congurations exhibited by voluntary regulatory programmes offers researchersopportu-
nities to examine a range of complex governance topics, from the interactive evolutionary
dynamics of public and private programmes (Cashore et al. 2004; Auld 2014), to state
responses to privately sponsored initiatives (Gulbrandsen 2014), and the many functions
that public organizations full in voluntary programme settings (Van der Heijden 2015).
This article focuses on a specic voluntary programme variant: state-sponsored certi-
cation that is administered by third-party certiers from across the public, nonprot,
and private (for-prot) sectors. Leveraging this programme design, it draws attention to
the increasingly observed phenomenon of ‘regulatee choice’ in which programme partic-
ipants choose from among programme administrator alternatives (e.g. Meidinger 2006;
Van der Heijden 2010). In addition, it sheds light on the dynamics of intersectoral reg-
ulatory intermediaries (Levi-Faur and Starobin 2014) by examining the factors associated
with regulatee choice from among public, nonprot,and private certiers. Seemingly anal-
ogous cases of ‘citizen choice’, in the areas of healthcare (e.g. Lane and Lindquist 1988)
and education (Levin 1991), highlight the importance of service characteristics such as
cost and quality. The article posits that in the case of a voluntary regulatory programme,
where regulatee choice decisions likely take into account the signalling effects of associ-
ation with a particular certier (Potoski and Prakash 2009; Auld 2014), factors associated
with credibility – such as certier reputations – also inuence regulatee choice.
David Carter is at the Department of Political Science, University of Utah, USA.
Public Administration Vol.95, No. 1, 2017 (232–248)
© 2017 John Wiley & Sons Ltd.
REGULATEE CHOICE IN CERTIFICATION SCHEMES 233
Empirically, the article examines farmers’ selection from among public, nonprot, and
private organic certiers. In the US, operations that wish to market or sell their products
as ‘organic’ must obtain United States Department of Agriculture (USDA) organic certi-
cation under the National Organic Program (NOP), and comply with NOP regulations.
Organic certication is administered by independent organizations fromacross the public,
nonprot, and private sectors. Certier service areas that overlap, combined with the fact
that operations pay for certication, create a competitive environment wherein certiers
compete for regulatee clients. The study is guided by the question: What factors matter in
regulatees’ choice from among public, nonprot, and private certier alternatives? Draw-
ing on a nation-wide survey of certied organic farmers, the relationship between regu-
latee choice and several selection factors is examined, including regulatee perceptions of
certier service attributes, certier reputations, and regulatee motivations for programme
involvement.
REGULATEE CHOICE AND CERTIFIER SECTOR
This article examines the factors that regulatees weigh when selecting from among certi-
er options. A basic premise of public service provision through choice alternatives is that
service recipients select ‘optimal’ service providers based on an assessment of providers’
services and cost (Le Grand 2007). Diversity in options thus allows a service recipient
to choose a provider that reects the recipient’s preferences. An important aspect of this
selection process is an information asymmetry that exists between service providers and
recipients (Vining and Weimer 1988). While service recipients can easily assess certain ser-
vice attributes, such as the bundle of services a provider offers and the fees it charges,
others, such as service quality,are more difcult to observe. Toaddress this asymmetry, ser-
vice recipients often rely on secondary indicators of service provider attributes, including
referrals from trusted peers and recognizable ‘cues’ of service attributes that are difcult
to observe (Easley and O’Hara 1988; Handy 1997).
Regulatee perceptions of public, nonprot, and private certier options are therefore
inuenced by sector to the extent that public, nonprot, and private certiers vary sys-
tematically in observable organizational and service attributes. For example, legislation
and associated statutes often limit the range of services that public sector organizations
are able to perform (Andrews et al. 2006), resulting in regulatee perceptions of public cer-
tiers as offering restricted services compared to their nonprot and private counterparts.
Regulatee perceptions are further inuenced by sector to the extent that it serves as a cue
for unobservable service attributes (Handy 1997; Handy et al. 2010). Sector thereby shapes
regulatee perceptions throughthe assumptions that regulatees hold regarding public, non-
prot, and private sector characteristics and values (Drevs et al. 2012).
In addition to the weighing of observable service characteristics and secondary cues,
regulatee choice is likely to be inuenced by more subjective factors (Aaker et al. 2004;
Aaker et al. 2010). For example, while sector signals certain service characteristics – such
as the aforementioned constrained service offerings of public organizations – sector may
also elicit emotive responses based on regulatee perceptions and opinions –such as that
nonprot organizations are trustworthy and private organizations are competent (Aaker
et al. 2010). In this study, it is assumed that a regulatee’s perceptions regarding certi-
ers’ service attributes and underlying goals are shaped by a combination of ‘objective’
inputs, such as the available information regarding certier options, and ‘subjective’
Public Administration Vol.95, No. 1, 2017 (232–248)
© 2017 John Wiley& Sons Ltd.
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