Information Concealing and Conspiring Problems of Food Safety Regulators in China: Interpretation Based on Principal-agent Model and Its Practical Verification

Abstract

Abstract:

According to principal-agent theory, we construct a model where consumers entrust food safety regulators to make sampling inspection and report food safety information to consumers. Our results show two existing institutional arrangements in China's food safety regulation are improper and regulators' incentives might be strongly distorted. The first arrangement is 'result-based-assessment', where regulators' performance are evaluated by the true level of food safety, and the second is supervision monopoly, namely the power of inspection and the power of punishment on producers are centralized in the hand of regulators. Representative cases with regard to regulation responsibility in food safety incidents partly confirm the deduction. And correspondingly, we propose several suggestions on ensuring incentive compatibility of food safety regulators.

Key words: food safety, regulation mechanism, incentive compatibility, principal-agency theory

Quan Shiwen, Zeng Yinchu. Information Concealing and Conspiring Problems of Food Safety Regulators in China: Interpretation Based on Principal-agent Model and Its Practical Verification[J]. , 2016, 28(2): 210-218.

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