Conventions Theory: Understanding Economic Coordination in Global Markets

Walk into any Indian grocery store and pick up a packet of rice, a bottle of honey, or a carton of milk. Each one carries marks, grades, and labels that quietly tell you it meets a certain standard. But who decided what “good quality” means in the first place? Why does a mango grown organically command a different price and a different label than one grown conventionally, even when both look the same? These questions sit at the heart of Conventions Theory, a body of ideas that explains how shared norms and standards, rather than prices alone, hold economic life together. It is especially powerful for understanding agriculture, where the rules of “quality” have become a battleground between powerful market actors and ordinary producers.

What is conventions theory? 🔗

Conventions Theory, known in French as économie des conventions, emerged in France in the 1980s. It was developed by a group of heterodox economists working around Paris, including Robert Salais, Laurent Thévenot, François Eymard-Duvernay, Olivier Favereau, and André Orléan. They were dissatisfied with mainstream economics, which assumes that self-interested individuals coordinate smoothly through prices in a free market. Instead, they argued that economic value and worth have to be interpreted and constructed in concrete situations, not simply read off a price tag.

The core idea is simple but profound. People cannot coordinate their economic, political, and social activity without first sharing some idea of the collective they belong to and the rules they will follow. These shared understandings are called conventions. A convention is a mutual, often unspoken agreement about how to act and how to judge what is good, fair, or valuable. Whether the coordinating rule is the market, a legal norm, public opinion, or tradition, some convention is always at work.

Why conventions are necessary 🔗

Markets are full of uncertainty. When you buy a litre of milk, you cannot personally test it for fat content, adulteration, or freshness. You trust a label, a brand, or a government grade. This problem of judging quality under uncertainty is exactly why conventions exist. Conventions Theory grew partly in dialogue with economic ideas about information, uncertainty, and bounded rationality, the recognition that buyers and sellers rarely have complete knowledge. A convention fills that gap by providing a shared frame of reference everyone can rely on. Without conventions, every transaction would require endless negotiation, and trust would collapse.

The six orders of worth 🔗

The most influential extension of this approach came from Luc Boltanski and Laurent Thévenot in their book On Justification. They argued that modern societies are not governed by a single logic but by several coexisting systems of value, which they called orders of worth or “common worlds.” Each world has its own principle for deciding what counts as worthy or legitimate. They identified six main logics, each linked to a classic thinker:

The market world values price, competition, and the ability to sell. The industrial world values efficiency, productivity, measurement, and technical standards. The civic world values the collective good, solidarity, and rights over individual gain. The domestic world values tradition, trust, hierarchy, and personal relationships. The inspired world values creativity, originality, and passion. Finally, the world of fame (or opinion) values reputation and public recognition.

How worlds collide and compromise 🔗

These worlds rarely sit quietly side by side. Disputes arise when people justify their actions using different principles. A farmer defending traditional seed-saving appeals to the domestic world, while an exporter demanding uniform produce appeals to the industrial world. According to Boltanski and Thévenot, such conflicts are settled either through “tests of worth” within a single world or, more often, through compromises between worlds. A common example is the compromise between the market and industrial worlds, where the pursuit of profit is combined with efficient, standardized production. Understanding these tensions is the key to applying the theory to real economic struggles.

Conventions in agriculture and food 🔗

Agriculture is where Conventions Theory has been applied most richly, and for good reason. Since the 1980s, food systems worldwide have gone through what scholars call the “quality turn.” Quality stopped being a simple, objective fact and became a contested social construction. Convention Theory understands quality as tacit social agreements supported by different repertoires of justification. In other words, what counts as a “quality” tomato depends on which world you are standing in. For a supermarket buyer it means uniform size and long shelf life; for a local consumer it might mean taste and freshness; for an environmentalist it means how it was grown.

From market to industrial conventions 🔗

A central insight is the shift from market conventions to industrial conventions in food production. Under a market convention, quality is judged loosely by price and immediate competitiveness, with sellers and buyers negotiating face to face. Under an industrial convention, quality is defined by measurable, standardized criteria, things like grade, weight, pesticide residue limits, packaging norms, and traceability across the supply chain.

As food moved into global value chains, this industrial logic spread rapidly. Researchers studying food producers describe how the quality turn reshaped the worlds of production and, with them, the power of producers within food chains. The catch is that these industrial standards are often not set by the farmers themselves. They are dictated by powerful market actors, large retailers, processors, and export agencies who have the leverage to impose their own definitions of quality on everyone upstream.

Standards, power, and the small farmer 🔗

This is where the political dimension becomes sharp. A small producer who wants to sell beyond the village market must now satisfy multiple, overlapping standards simultaneously. In the Indian context, a farmer dealing in grains, pulses, or spices may need to meet food safety standards set by the FSSAI, the Food Safety and Standards Authority of India, while also seeking the Agmark grade administered by the Directorate of Marketing and Inspection for agricultural commodities. A producer aiming for export markets must additionally comply with rules monitored by APEDA, the Agricultural and Processed Food Products Export Development Authority, which oversees organic certification under the National Programme for Organic Production.

Each certification carries costs, paperwork, testing, and inspections that are far easier for large agribusinesses to absorb than for a smallholder with two acres. The convention of “industrial quality” therefore quietly reshapes who can participate in the market and on whose terms. Standards are never neutral. They encode the priorities of whoever has the power to write them, and they can become a barrier that pushes the weakest producers to the margins.

Where civil society enters the picture 🔗

If standards were left entirely to market and industrial logics, food quality would be defined purely by profit and efficiency. This is precisely where civil society pushes back, invoking the civic world and its concern for fairness, sustainability, and community. Movements for organic food, fair trade, and geographical indications represent attempts to define quality on different, more socially grounded terms.

The fair trade movement is a textbook case. Studies analysing it through Convention Theory show how fair trade tries to embed civic and domestic values, fairness to producers and respect for place, into a market that would otherwise reduce coffee or cocoa to a bulk commodity. Yet these efforts are fragile. Researchers note that civic coordination must be reinforced by state recognition to protect its integrity, otherwise it risks being absorbed and watered down by market forces. The label that began as an ethical statement can become just another marketing tool.

The Indian struggle over standards 🔗

India offers vivid examples of this contest. Geographical Indication tags for products like Darjeeling tea, Basmati rice, and Alphonso mango are attempts to protect the domestic and civic worth of place-based, traditional production against generic commodification. Organic labelling carries its own tension: alongside the formal, export-oriented certification system, civil society and farmer groups have promoted the Participatory Guarantee System, a more community-based, lower-cost way for small farmers to certify organic produce among themselves. The Jaivik Bharat logo introduced to help consumers identify authentic organic food reflects the state stepping in to stabilize a convention that the market alone could not be trusted to uphold honestly.

These are not just technical debates about labels. They are struggles over who gets to define value, who bears the cost of compliance, and whose vision of “good food” prevails. Conventions Theory gives us the vocabulary to see that a fight over an organic certification rule is really a clash between the market, industrial, and civic worlds.

Why conventions theory matters for global markets 🔗

In a globalised economy, the question of who sets the standards has become one of the most important political questions of our time. Global value chains link a farmer in Maharashtra to a retailer in Europe through a dense web of conventions, each one shaping prices, practices, and livelihoods. Conventions Theory reminds us that markets are not natural, self-regulating machines. They are social and political constructions, held together by agreements that some actors have far more power to write than others.

For students of civil society and political regimes, the theory offers a crucial lesson. Economic coordination is never purely economic. Behind every grade, label, and quality standard lies a negotiated, and often unequal, settlement between competing visions of worth. Recognising this turns an apparently dull topic, agricultural standards, into a live arena of democratic contestation where civil society can either be sidelined or can fight to reshape the rules.

What do you think? If quality is a social agreement rather than an objective fact, who in your view should have the final say in defining it, the market, the state, or organised civil society? And when a small farmer in India struggles to meet costly industrial standards set by distant retailers, is the solution to lower the standards or to strengthen the civic conventions that protect producers?

References

1. https://link.springer.com/chapter/10.1007/978-3-319-75328-7_4
2. https://sk.sagepub.com/ency/edvol/consumerculture/chpt/convention-theory
3. https://press.princeton.edu/books/paperback/9780691125169/on-justification
4. https://onlinelibrary.wiley.com/doi/10.1111/j.1467-6486.2010.00990.x
5. https://www.sciencedirect.com/science/article/abs/pii/S0743016717301183
6. https://link.springer.com/rwe/10.1007/978-3-030-52130-1_74-1
7. https://www.fssai.gov.in
8. https://apeda.gov.in
9. https://www.sciencedirect.com/science/article/abs/pii/S0743016702000517