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Abstract
Food safety is a key policy area that has recently witnessed substantial alignment of risk profiles and
regulatory interventions. More risk-based and flexible approaches to food safety controls are
increasingly adopted to ensure that greater emphasis is placed upon incentives for compliance
through, for example, use of preventive food safety management systems aimed at encouraging food
firms to manage risk associated with their products and processes.
Among the new regulatory approaches are Management-Based (MB) strategies which are
implemented in food and environmental safety controls. However, there is surprisingly no published
research that empirically evaluates the efficiency of the strategy in food policy areas applied. In this
paper, we first develop a mixed principal-agent model to study the incentives for efficient provision of
food safety under a MB regime adopted to enforce EU food hygiene legislation in the UK poultry
sector. We then econometrically test the corollary propositions of the theoretical model by using rich
panel data on inspection costs and compliance records for the firms governed by the regime. Findings
indicate that the MB regime entails significant losses of regulatory efficiency due to sizeable
economic rents appropriated by the firms through underperformance in delegated official hygiene
controls.