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CONTACT: Amy Smorodin
March 5 , 2007
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Governments Play Varying Roles in Standards System
Second Paper in Series Explores History of Government Standards

WASHINGTON D.C. - Industry standardization has grown from the three distinct realms of private firms, public sector regulation and inter-firm cooperation. These standard setting institutions evolve and react to the commercial environment, creating a "distinctly American system," explains Andrew L. Russell in "The American System: A Schumpeterian History of Standardization," a series of essays examining the historical development of American industry standardization. In "De Jure Standards Through National Labs and Federal Mandates," the second of three papers in the series, PFF Adjunct Fellow Russell discusses government influenced or enforced standards. Russell concludes that, except in cases of public goods, the American government has successfully deferred to the private sector for standards setting. The author urges policymakers to ensure mandates or indirect measures do not inadvertently create a competitive advantage.

In his paper, Russell explores the history of de jure standards, which can either be directly mandated, as in the case of weights and measures, or indirectly influenced by investment or antitrust policy. While governments as far back as the ancient Egyptians have implemented industry standards, their economic importance grew with the spread of industrialization. The author explains, "Throughout the 1800s, interrelated developments in politics, science, and economics - the rise of nationalism, a greater emphasis on accuracy and precision science, and the steady march of industrialization - further underlined the importance of standards for establishing competitive advantages in the industrial age."

Russell also analyses the roles the U.S. government has played in the system of standardization, specifically in the Information Age: investment and leadership in basics standards to relieve some financial burden from firms; specific research and development funding for information technology; and policies that support standards built through industry consensus. The author states, "American regulators have rarely taken direct control over economic functions, but have consistently implemented a variety of indirect measures – such as antitrust regulation, investments in the scientific knowledge base, and procurement for the military and other branches of government – with decisive consequences for the trajectory of American economic development in the private sector."

While a few exceptions exist where the U.S. government has played a direct role in standards setting, policymakers have preferred to rely on standards set by private firms and collaboration. Russell concludes the market-oriented approach to industrial standards greatly increases the chances of such standards being widely adopted and implemented. "In the United States, the public sector is still responsible for some foundational standards; but for the most part, private firms," he explains, "bear much of the responsibility for setting and maintaining standards, and for leading the process of technological innovation more generally."

"De Jure Standards Through National Labs and Federal Mandates," is the second of three papers in the series, "The American System: A Schumpeterian History of Standardization." The first paper, "De Facto Standards in American Industry" discussed industry standards developed by firms to promote efficient production, economies of scale, and competitive advantages. Both papers can be found on the PFF website.

Andrew L. Russell is a Ph.D. student in the Department of the History of Science and Technology at The Johns Hopkins University. He has worked at the Harvard Information Infrastructure Project in Harvard University's John F. Kennedy School of Government and has presented papers on Internet standards before the Society for the History of American Foreign Relations and the Telecom Policy Research Conference.

The Progress & Freedom Foundation is a market-oriented think tank that studies the digital revolution and its implications for public policy. It is a 501(c)(3) research & educational organization.

 

 

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