Does fair trade labeling lower or increase conflict? Kenya case study

Abstract

This paper aims to understand if there is an impact of fair trade labeling on conflict in developing countries, taking Kenya as a case study from 1997 to 2020. The analysis is done for tea, a key commodity in Kenya’s economy, and coffee ,a secondary crop in the country. Fixed-effects and instrumental variables conclude that there is a positive relationship between the number of labels in an area and the conflict observed in it. The same positive relationship holds for the impact of commodity price shocks of tea, enforcing the hypothesis that fair trade labeling increases conflict.