Certification and the State

Abstract

Third-party certification is usually a nonstate market-driven governance system in contrast to regulation. A firewood certification program in Chile uses a market-driven approach to increase compliance with regulation. The firewood certification program is unusual in operating in local markets and certifying a basic fuel. The program seeks to formalize the firewood market by certifying dealers rather than producers. Certified firewood is produced under a forest service management plan and dried to reduce air pollution. Using interviews with market actors, program staff, and consumers, as well as document analysis, the research looked at three arenas in the relationship of the certification to the state: (1) the role of the state in program governance, (2) the role of coercion, and (3) the consequences of market formalization for program goals. The study found that public agencies constituted a majority of the local certification councils. The program encouraged regulatory agencies to use enforcement against dealers who did not comply with regulations. The focus on formalizing the firewood market included imposition of the value-added tax (VAT), which increased the price of certified wood and diminished the priority of other certification goals. Certification opened the market to new actors and greater capital penetration and integration.