The Political Economy Of Standards And Standard Setting Processes

Published online by Cambridge University Press: 05 August 2015 As demonstrated in Chapter 3, the introduction of standards typically impacts both efficiency and rent distribution between different groups in society. This, in turn, is likely to induce lobbying by interest groups to influence government decision making on public standards. As we show in this chapter, this may lead to “overstandardization” or “understandardization,” depending on the relative political pressures, much like taxes and subsidies are used in other areas of public policy and public... One can thus expect to observe variations in public standards setting across countries. However, the observed variations in standards do not seem to be random.

There appears to be a positive correlation between public standards and the level of economic development. An important question is what causes this correlation. The most straightforward explanation is that rich consumers (countries) prefer higher standards (e.g., Wilson and Abiola, 2003). Although this is undoubtedly an important element, in this chapter we show that the impact of development on the government's choice of standards is more complex and depends on several factors – including, besides... The political economy approach in this chapter, as well as in subsequent ones, is based on the seminal “protection for sale” framework of Grossman and Helpman (1994) but applied to standard setting. We develop a political economy model of public standards in which both producers and consumers are actively and simultaneously lobbying.

In this chapter, we apply our model to a closed economy to analyze the essential features of the political economy equilibrium. In Chapter 5, we extend the model to study the political economy of standards in an open economy, and to derive the conditions under which standards can be categorized as protectionist instruments. We start by developing a model of the economy (Section 4.2) where standards benefit consumers because standards guarantee that the product satisfies certain characteristics preferred by the consumer. Production costs are increasing in the level of the public standard. As in Chapter 3, producers or consumers may gain or lose from a change in the standard. With these potential welfare effects, we derive the political incentives and the political equilibrium (Section 4.3).

We then analyze how the equilibrium is affected by several political and economic characteristics (Section 4.4). We show that either over- or understandardization may result (Section 4.5). The simple act of picking up a product → a bar of soap, a box of cereal, a new shirt → immediately thrusts you into a complex web of invisible decisions made long before... Reading the label, searching for words like “eco-friendly” or “responsibly sourced,” often feels like attempting to decipher a secret language, leaving a residue of confusion and doubt. This feeling of being intellectually adrift in the checkout aisle is not accidental; it is a direct consequence of the Political Economy of Standards, a silent, powerful system determining the very meaning of “good”... Understanding this concept begins with recognizing that a standard, whether it is a technical specification for material safety or a voluntary certification for labor practices, is fundamentally a political statement wrapped in technical language.

These rules, often established by non-governmental organizations, industry consortia, or international bodies like the International Organization for Standardization (ISO), decide which products gain legitimacy and which do not. Whoever controls the definition of “sustainable” effectively controls market access, thereby allocating economic power and environmental costs. Formal standards function as gatekeepers, setting the minimum acceptable threshold for market participation, particularly in global supply chains. When a company claims its packaging is “compostable,” that claim is not based on a feeling; it rests upon a specific, often highly technical standard (like ASTM D6400 or EN 13432) that defines the... Yet, the creation of such a standard involves intense negotiation among competing interests: manufacturers wanting flexibility, environmental groups demanding rigor, and waste management companies needing feasibility. The resulting standard is a compromise, a treaty signed under the pressure of commerce.

These negotiations are rarely transparent to the average consumer, yet they dictate the tangible reality of the products we buy. The final product design, the thickness of the plastic, the origin of the cotton, and the wage paid to the worker are all structural outcomes of these codified rules. Decoding the tiny symbols on a package, therefore, becomes an act of political literacy, a necessary step toward informed consumerism. Standard-setting is not (only) concerned with the solution of technical problems. Under the guise of technical problem solving, standard-setting processes often deal with redistributive and normative issues. In standard- setting there tend to be clearly identifiable winners and losers.

This makes it inherently political in nature. Democratic political systems generally foresee legislative processes to deal with such issues. Delegating these issues to standard-setters is in itself a political choice. © 2014 by Walter de Gruyter GmbH, Berlin/Boston Published online by Cambridge University Press: 06 July 2012 This paper reviews the emerging literature on the political economy of public standards in an open economy to explain why standards are set at certain levels, and how this affects trade.

We use a simple framework to illustrate how interest groups may influence the standard-setting process, and which factors may affect the political equilibria. We analyze the relation between trade and standards, and their potential protectionist nature. We argue that standards may act as barriers or catalysts to trade, that both under- or over-standardization may occur, and that standards may serve as protectionist instruments, or not. View all Google Scholar citations for this article. To send this article to your Kindle, first ensure no-reply@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your... Then enter the ‘name’ part of your Kindle email address below.

Find out more about sending to your Kindle. Find out more about saving to your Kindle. Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

People Also Search

• The Political Economy of Standards and Standard-Setting Processes
• 4 - The Political Economy of Standards and Development
• The Political Economy of International Standard Setting in Financial ...
• The political economy of standards setting by newcomers: China's WAPI ...
• Political Economy of Standards → Term
• (PDF) A political economy of accounting standard setting
• PDF GLS Jun13 togowith - Faculty of Business and Economics
• Trade and the political economy of standards | World Trade Review ...