World Standards Day: Celebrate or Mourn?

Today happens to be World Standards Day, a day that honours the work of the thousands of experts involved in setting the huge range of voluntary international standards that regulate production and trade in a globalized economy. Depending on your view of globalization, it’s a day either to be celebrated or mourned.

The standards in question include various standards established by groups like the International Electrotechnical Commission (IEC), the International Organization for Standardization (ISO), and the International Accounting Standards Board (IASB).

I’m currently reading a very good book on just this topic, namely The New Global Rulers: The Privatization of Regulation in the World Economy, by Tim Büthe and Walter Mattli. The book examines the wide and growing range of international, private (i.e., non-governmental) standards being set by groups like the IEC, ISO, and IASB. As Büthe and Mattli point out, such standards are a double-edged sword.

On one hand, they facilitate the international flow of goods and services, making it easier for companies to ship products overseas or set up branch offices in foreign countries without learning entirely new, idiosyncratic local standards. And (being established by international groups of experts) they do this without the direct participation of governments that may not have the financial or technical capacity to set such standards. On the other hand private, international standards don’t bring benefits equally to all: not all companies are equally-well equipped to switch from older national standards to newer international ones, and some countries’ internal regulatory regimes make the switch even harder. And regardless, as Büthe and Mattli point out, adopting new standards always brings costs, including things like the costs of training, the cost of redesigning products, and even paying licensing fees for proprietary technologies.

It seems appropriate, at this juncture — while the Occupy Wall Street movement is a) lamenting the nature of government-industry interaction, and b) deciding whether it is or is not part of the anti-globalization movement — to give some serious and well-informed thought to the desirability of regulatory regimes that are both non-governmental and international.

2 comments so far

  1. Gail Gardner on

    I vote for mourn. I was involved in implementation of ISO9000 when I worked for IBM. What it came down to was we were required to document processes. It didn’t matter if they were GOOD processes or EFFECTIVE processes – it only mattered that we documented them.

    We were required to get rid of all books and reference materials that weren’t current which meant giving up important documentation that was no longer being updated that we NEEDED for the maintenance of older technology.

    Because of the cost implementing and getting certified as ISO compliant, I see these types of standards as yet another way major corporations can prevent competition from small businesses the same way that red tape, licenses, fees, unnecessary regulations and taxes that major companies can escape but small ones are required to pay are used to squelch competition and keep people beholden to employers.

    The more difficult you can make it for individuals and small businesses that are not wealthy or well connected to succeed, the more power you have over them.

    What is really needed is the sharing of best practices – NOT the imposition of control through regulation.

  2. Yuchen Luo on

    It’s hard to say whether it’s a celebrate or mourn, but i think the disadvantage side dominated the double-edged sword. Although the standard could make many cross-broader transaction more easier and efficiency, but if we look into the other side, if the transaction is between a developing country and a developed country, it’s not fair for the developing country to invest in their products or facilities to adjust the standard.

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