The importance of standards in the economy

Standards are essential for facilitating the free exchange of goods and services. They also help to prevent adjustment costs. 

Everyday standards

Standardization is very important, not only in everyday life but for the functioning of the economy. Rules developed during the standardization process also inform the state of the art for the object or sector concerned. Anyone using standards is following recommendations issued by experts from all over the world. Their origin and application make them recognized technical rules. 

Standards in policy and the economy

Common norms and standards allow for the free trade of goods and services without any additional adjustment costs. Norms encourage rationalization and guarantee quality in economics, technology, science and administration. Standardization represents a traditional area of industrial policy. From an economic perspective, norms and standards particularly encourage the free movement of markets and companies’ capacity to innovate. Standardization contributes to spreading technical know-how and innovations more quickly. Companies’ competitiveness is strengthened. 

The legal nature of norms

By virtue of their origin, extent, content and scope, norms take the form of recommendations. Nevertheless, they do not constitute a legal obligation, anyone being free to respect them or not. However, they may become mandatory due to legal and administrative rules developed by legislators, the author of the order, or by contracts stipulating compliance with them. They are often used to complement an obscure legal term (e.g. the term “Inventory”) and are thus given legal meaning.

Source: Wikipedia

Last modification 20.02.2020

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