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Legitimacy, Institutional Design, and Dispute Settlement: The Case of Eco-Certification Systems

Abstract Certification is becoming a significant global governance instrument for regulating transnational supply chains. The article analyses more than 400 eco-certification systems (CS) on three components related to legitimacy: the openness of the standard-setting process, the independent nature of conformity assessment, and the presence of dispute settlement systems. The article focuses specifically on the so far neglected third component, since the presence of dispute systems plays an important role in the development and granting of legitimacy to CS. These systems open up the CS to external stakeholders with sometimes conflicting interests. The article shows that only a few CS contain dispute settlement systems and explores potential explanations for this, highlighting the importance of the political and economic institutional environment for the institutional design of CS. This design, in turn, affects their ability to gain legitimacy.