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Abstract
Traditional food marketing systems in developing countries are presumed to suffer from a
number of deficiencies. Policy makers therefore often try to regulate them and modern
private market arrangements are increasingly emerging to help deal with some of the
deficiencies. However, it is unclear if and to what extent regulation and modernization
affects governance of these markets. We look in this paper at the case of coffee in urban
markets in Ethiopia. We find no significant cheating with weights but there is illegal
trade, with significant non-allowed trade of export quality coffee in local markets, and a
consistent pattern of mis-representation of not easily verifiable quality characteristics.
We further find that modernizing marketing formats, including modern retail, and
branded and packaged products, deliver higher quality (at a high price) but they are not
more trustworthy than traditional ones along these three dimensions.