STANDARDS FOR DEVELOPMENT
Rising Standards Reshape the Global Economy
International standards are proliferating, delivering major benefits to wealthy nations and big multinationals while leaving many developing countries behind, a new World Bank report shows.
Main Messages
- Standards are the hidden foundations of prosperity. They are the shared rules that make plugs fit sockets, medicines work safely, and digital systems connect seamlessly. Standards embody collective knowledge, build trust, and enable economies to function efficiently. When they fail, markets fragment; when they work, prosperity follows.
- For low- and middle-income countries, standards have never mattered more. Nearly 90 percent of world trade is now shaped by nontariff measures, most linked to standards. From digital systems for payment to charging stations for electric vehicles, new technologies can deliver economywide benefits only when standards exist. Mastering them can enhance national competitiveness and protect against technological, financial, and environmental risks.
- Standards are a versatile tool of economic policy.Governments can use voluntary standards to drive innovation and give technical guidance on compliance with regulations. They can also make them mandatory when uniform compliance is necessary to protect health, safety, or the environment. In addition, governments can deploy standards as an instrument of industrial policy without reference to specific technologies or firms.
- Ambition must match capacity.Countries should follow a trajectory that takes into account their stage of economic development, first adapting international standards to local realities when needed, then aligning with them as institutions mature, and actively participating in authoring standards in priority areas as capabilities grow. Rwanda’s Zamukana Ubuziranenge (“Grow with Standards”) program exemplifies this path, helping micro, small, and medium enterprises progress step by step towards compliance with international standards.
- Investing in quality-enhancing infrastructure makes standards work well. The system of testing, certification, metrology, and accreditation in a country is what makes standards effective. Such systems are expensive to build and easy to neglect. Countries should start with public provision of quality-enhancing services in key sectors, then gradually open these services up to private participation. In many places, capacity gaps are stark: Ethiopia has fewer than 100 accredited auditors for compliance with standards of the International Organization for Standardization (ISO), compared with 12,000 in Germany.
- To make standards a springboard for development, countries should do the following:
- Create incentives for firms to upgrade the quality of their exports rather than imposing unrealistic mandates.
- Adapt and sequence standards to align with the national capacity to enforce them.
- Participate actively in international forums for setting standards.
- Invest in and share quality infrastructure resources regionally.
- The global community, for its part, must do the following:
- Support participation by low- and middle-income countries in developing international standards and design tiered standards that reflect diverse capacities among countries.
- Deepen regulatory cooperation and reduce fragmentation.
- Develop credible standards for emerging technologies and actions to prevent or mitigate climate change.
- Expand research and data on the economic and social impacts of standards.
- Standards matter for development. Countries that take them seriously are getting ahead. Countries that ignore them risk falling behind.
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