The emergence of transnational standards-setting organizations and the global standards that they promote, although often overlooked, are central features of globalization and have subtle yet far-reaching impacts on how major infrastructure projects are designed, constructed and operated worldwide.

For example, consider the following transnational standards-setting bodies that have created and promulgated standards that penetrate into and influence the development of many major infrastructure projects today:

• FIDIC - Standardization of Contracts
• ILO - Standardization of Treatment of Labor
• ISO - Standardization of 15,000+ Technical Systems
• IATA - Standardization of Airports
• ITU - Standardization of Telecom
• UIC - Standardization of Railways

These organizations publish various standards -- policies, guidebooks, and so-called best practices -- and they use various tactics including educational programs and coercive pressures to inspire, guide and compel governments and organizations worldwide to adopt, disseminate and reinforce their standards.

Benefits of such standardization include the worldwide harmonization of technical, managerial and institutional systems and thus increased possibilities for international trade and economic integration. And the treatment of labor will surely improve with NGOs like ILO on the watch - particularly on major projects in developing countries that employ tens of thousands of low-skilled workers.

And yet, globalization critics argue that as airports, trains, and telecom systems begin to look more alike, there may be unintended consequences. The few privileged firms that seize control of globally dominant product models will surely seek to protect the 'status-quo' in order to maximize sales and minimize competition. But, in general, with greater monopoly power comes higher prices and less variety for end users. Perhaps even worse, the pace of innovation will tend to slow as it becomes harder for smaller firms with non-standard systems to compete in the global marketplace.

What will happen when the self-appointed custodians of world standardization abuse their powers and lock competition out of the marketplace? Until there is a transnational equivalent of the Anti Trust Division of the U.S. Department of Justice, it does seem that it will be difficult indeed to sanction these organizations for predatory kinds of behavior.

Posted by rjorr at June 10, 2006 3:31 PM