The Roles of Standardization, Certification and Assurance Services in Global Commerce
51 Pages Posted: 4 May 2008
There are 2 versions of this paper
The Roles of Standardization, Certification, and Assurance Services in Global Commerce
Date Written: May 2008
Abstract
In this article we examine the rapid emergence and expansion of standardized product and process frameworks and a private-sector compliance and enforcement infrastructure that we believe may increasingly be providing a substitute for public and legal regulatory infrastructure in global commerce. This infrastructure is provided by a proliferation of performance codes and standards, many of which define acceptable social and environmental behavior, and a rapidly-growing number of privately-trained and authorized inspectors and certifiers that we call the third-party assurance industry. We offer reasons for this development, evidence of its scope and scale, and then describe the phenomenon in more detail by examining supply chain arrangements in two industries, food products and apparel, where the use of third-party standards and assurance services has expanded especially rapidly. We conclude with a discussion of the implications for the "make or buy" decision at the core of the theory of the firm. We argue that as quasi-regulatory standards are developed within various industries, and as performance to these standards can be systematically evaluated using third-party inspectors and certifiers, the costs of moving production outside of vertical firm hierarchies drop. We believe this may be an important factor in accelerating the shift to outsourcing that has been observed over the last two decades.
Keywords: standardization, compliance, enforcement infrastructure, assurance, quasi-regulatory standards, global commerce, third-party inspectors
JEL Classification: K20, K22, K32
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
The Roles of Standardization, Certification, and Assurance Services in Global Commerce
By Margaret M. Blair, Cynthia A. Williams, ...
-
The Solution to the 'Democratic Deficit': A New Type of Governance for the European Union?
By Laurent Pech
-
Monitor and Manage: MiFID and Power in the Regulation of EU Financial Markets
-
From Soft Law to Hard Code: The Juridification of Global Governance
-
The Many Lives - And Faces - Of Lex Mercatoria: History as Genealogy in International Business Law
-
By Ingo Venzke
-
Governance Under Limited Sovereignty
By Thomas Risse