World Bank Warns Global Standards Reshape Economy, Urges Developing Nations to Act

The report is the first comprehensive global analysis of how standards influence trade, innovation, and long-term economic growth.

A new World Bank World Development Report 2025, Standards for Development, reveals that international standards—governing everything from food labeling to 5G technology—are becoming one of the most powerful, yet least understood, forces shaping the global economy. While these standards deliver major economic advantages for wealthy nations and multinational corporations, many developing countries remain excluded from their design and benefits.

The report is the first comprehensive global analysis of how standards influence trade, innovation, and long-term economic growth. It warns that standards have shifted from being mere technical guidelines to becoming strategic tools that determine competitiveness, market access, and global supply chain integration.

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Standards: The Hidden Infrastructure Driving Global Prosperity

The report highlights that standards today are as essential as roads, ports, and digital networks. A striking example is the standardized shipping container, which boosted global trade more than all international trade agreements combined over the past six decades.

But standards are increasingly used as trade weapons:

• In the late 1990s, 15% of global trade was affected by non-tariff measures.

• Today, 90% of global trade is influenced by requirements such as pesticide limits, quality controls, and safety labeling.

World Bank Chief Economist Indermit Gill emphasized their importance:

“Standards are both central and unsung. When they’re set right, they go unnoticed—but they enable global prosperity. When countries adapt, align, and author standards, they become powerful tools for growth and poverty reduction.”

Gill urged developing nations to treat standards as a core pillar of their development strategies, not an afterthought.

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Developing Countries Largely Excluded From Standard-Setting

Despite their enormous impact, the majority of developing countries have limited participation in global standard bodies:

• At ISO (International Organization for Standardization), developing countries sit on less than one-third of technical committees.

• Their representation is even lower in other standard-setting bodies.

• Capacity constraints—technical expertise, funding, and institutional support—prevent meaningful engagement.

ISO’s Secretary-General Sergio Mujica stressed the importance of inclusive participation:

“Standards are critical enablers of sustainable, inclusive development. Unlocking their potential means ensuring all countries can participate meaningfully in their creation.”

The appetite for standards continues to surge:

• ISO has issued over 20,000 standards, half since 2000.

• In 2024 alone, international bodies issued more than 7,000 new standards.

This rapid proliferation means developing countries risk falling further behind if they do not strengthen their standardization capacity.

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A Strategic Framework: Adapt, Align, Author

The report proposes a three-stage strategy to help countries effectively use standards as development tools:

1. Adapt

At early development stages, countries should adapt international standards to local needs instead of copying advanced standards that exceed domestic capacity.

2. Align

As capacity increases, governments should align domestic regulations with global standards to reduce trade barriers and help firms compete in international markets.

3. Author

At advanced development stages, countries should author or co-author new standards, shaping global norms to reflect their priorities and enhance technological leadership.

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Japan’s Transformation: A Model of Standards-Driven Development

The report highlights Japan’s post-WWII journey as a global case study. Initially known for low-quality exports, Japan became an international standard-setter by:

• Adapting foreign ideas through the Japanese Standards Association

• Implementing Total Quality Management (TQM) nationwide

• Turning standardization into a national culture of excellence

This strategic use of standards propelled Japan into the ranks of global manufacturing leaders.

Xavier Giné, Director of the 2025 World Development Report, summarized the lesson:

“Standards are the foundation for innovation and competitiveness. Countries that make them part of their development strategy are the ones that rise to prosperity.”

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A Call to Action for Developing Economies

The report warns that unless developing nations invest in standardization institutions, build technical expertise, and participate more in global committees, they will remain rule-takers in an economy increasingly defined by international norms.

Harnessing standards could help these countries:

• Improve product quality

• Boost exports

• Attract investment

• Drive innovation

• Reduce poverty

The World Bank urges governments to act now, before the global standards landscape becomes even more complex and exclusionary.