Evaluating Ethical Product Havens in the Global Economy

Suny At Buffalo, Amherst NY

Investigators

Abstract

This project will examine the evolution of trade patterns in the ethical diamond market, focusing specifically on how they have evolved since the late 1990s when Canadian diamonds entered and quickly cornered the so-called "ethical" market. This project will focus on how consumers and retailers evaluate different ethical products, and how "ethical havens" - production sites favored for their ethical credentials, to the relative exclusion of others - are formed and challenged over time. This research will contribute to public policy debates about ethical market access and outcomes for countries and firms. In other words, how do countries or individual operations gain ethical consumers' and retailers' trust and allegiance? In light of the advocacy of ethical markets as means of economic development and social and environmental regulation by institutions such as the World Bank and the US Agency for International Development (USAID), it is important to provide communities, firms, non-governmental organizations (NGOs), national governments, and others with insights about how to actively intervene to increase the viability of those projects with the most benefits on the ground or, more fundamentally, whether or not to pursue ethical markets in the first place. The researcher will share the results of this research through summary reports, speaking engagements, and media outreach. She will also convene a workshop on ethical havens to foster comparative work (including a book project) on ethical markets and their spatial outcomes across multiple industries, and will mentor undergraduate and graduate research assistants in qualitative and quantitative data gathering and analysis. One of the key questions surrounding so-called ethical markets is who benefits? While there is evidence of price premiums and other benefits for producers, there is also evidence of the dilution of ethical standards over time and the exclusion of the most progressive practices and smallest producers. In the case of ethical diamonds, the market has diversified over time, with new African empowerment discourses backing product offerings from a range of countries, and a diversity of retailer trajectories (i.e. some switching away from Canadian diamonds, others sticking with them, and yet others diversifying). The question remains, to what extent have the challenges to Canada's ethical monopoly actually changed the market? Specifically, how much market share have different ethical alternatives, including Canadian diamonds, gained and lost over time; how have their governance structures and marketing strategies changed over time; and, what factors explain these market shifts? This project will combine quantitative and qualitative analysis, including the creation of a database of ethical product offerings and representations (including changes over time), in-depth interviews with retailers and other stakeholders, and consumer surveys. Since consumer and corporate cultures vary geographically, this study will take a comparative approach, focusing on potential national and sub-national differences among major ethical diamond markets (the United States, Canada, and the UK).