Opening the “black box” of food safety policy implementation: The efficiency-enhancing role of a private meso-institution

There is continuing interest in how rules created at the "institutional environment" level influence the performance of food safety policies. The influence of institutional rules on the behavior of farms and firms may vary widely depending on how strongly incentives reach potential users. This article assesses how the creation of a private meso-institution (i.e., Conseleite) affects the implementation of food safety guidelines in the Brazilian dairy industry. We use a dataset that has laboratory analyses of milk from 18 out of the 27 Brazilian states over a period that goes from 2006 to 2014. We show that the creation of Conseleite has led to an increased effectiveness of implementation of the Normative Instruction 51, which sets indicators and basic parameters of milk quality in Brazil. Specifically, the creation of Conseleite in the Brazilian state of Mato Grosso do Sul led to a decrease in the low-quality index related to the bacterial contamination of milk. In turn, we find that Conseleite played a limited role in raising the values of the high-quality milk index. Our conclusions highlight the fundamental role of mesoinstitutions in bridging the gap between the "institutional environment" level and the "governance" level. This study sheds light on a potential policy implementation path for other developing and emerging countries in the dairy industry, which is marked by frequent food safety scandals.