Standards are shaping development

For decades, development debates have revolved around trade, finance, technology and governance. Tariffs were cut, capital was liberalised and institutions reformed. Yet beneath these visible levers sits a quieter force that increasingly shapes who grows, who competes and who falls behind. Standards, from how goods are measured and certified to how data flows and pollution is monitored, now form the invisible architecture of modern economies.

The World Development Report 2025 places standards at the centre of development strategy, and its core argument deserves serious attention. Standards are not neutral technical tools. They are economic policy instruments with real distributional effects. Used well, they can raise productivity, protect citizens and manage risk. Used badly, they can exclude small firms, fragment markets and lock countries into low quality, low growth paths.

This matters because the nature of global competition has changed. Estimates suggest that close to 90 percent of global goods trade is now affected by non-tariff measures, most of them linked to standards. This reflects legitimate concerns about safety, sustainability and consumer protection. But it also means that market access increasingly depends not on tariff preferences but on the ability to measure emissions, certify processes, document compliance and demonstrate quality. For many low and middle income countries, that capability remains limited.

The report rejects the false choice between high standards and development. Instead, it argues that ambition must be matched with capacity. In recent years, many governments have adopted the most stringent standards from advanced economies, hoping to signal seriousness, attract investment or align with global norms. Often, the result has been counterproductive. Where enforcement capacity is thin, compliance becomes selective, corruption flourishes and markets consolidate around large firms that can afford certification. Smaller firms retreat into informality or exit altogether, undermining jobs and competition.

The alternative proposed is a sequenced approach. At early stages of development, countries should adapt international standards to local conditions, especially for domestic markets and non-tradable services. As firms upgrade and institutions strengthen, standards should progressively align with global norms. Over time, countries should aim to author standards in areas where they have developed expertise, shaping the rules rather than simply importing them.

This is not an abstract theory. The report documents how countries such as South Korea embedded standards into industrial policy, procurement and export promotion, turning quality into a source of competitive advantage. It also highlights how gradual, tiered regulatory approaches, including vehicle emissions standards in China and India, allowed firms time to invest while steadily raising environmental ambition. In both cases, sequencing mattered as much as the end goal.

A recurring theme is quality infrastructure, the ecosystem of metrology, testing, certification and accreditation that makes standards real. Without it, standards remain paper rules. Building this infrastructure is expensive and politically unglamorous, but the payoffs are substantial. Firms gain credibility, regulators gain leverage and consumers gain trust. Where such systems function well, markets operate with less friction and lower costs.

The report is also clear eyed about institutional weaknesses. In many developing countries, national standards bodies combine roles that should be kept separate, setting standards while also earning revenue from certification. This creates conflicts of interest and undermines confidence. Reform here is less about copying institutional models from high income countries and more about sequencing, transparency and regional cooperation. Not every country needs every laboratory. Shared facilities and mutual recognition can deliver scale without wasteful duplication.

Standards matter far beyond trade and industry. In health and education, simple process standards have delivered meaningful improvements. Childbirth checklists have been shown to reduce preventable complications. Clear learning benchmarks have helped improve literacy outcomes. These examples underline an important point. Standards do not need to be complex to be effective. They need to be enforceable, credible and adapted to context.

The report’s discussion of risk is particularly timely. Financial crises, environmental degradation and emerging technologies share a common feature. Without agreed rules, private incentives can generate systemic harm. Standards are often the first line of defence. Yet the global system is unbalanced. There is an abundance of detailed standards for relatively low risk products, and glaring gaps in areas such as artificial intelligence and biotechnology, where stakes are high and coordination is hardest. Geopolitical rivalry has slowed cooperation precisely where it is most needed.

For advanced economies, the report carries an implicit warning. Well intentioned standards embedded in regulation, from carbon border measures to digital compliance regimes, can function as de facto trade barriers if they ignore capacity constraints elsewhere. This risks deepening global divides and undermining cooperation on shared challenges such as climate change. Supporting participation by developing countries in standard setting is not charity. It is self-interest. Standards that are co-created are more likely to be implemented, trusted and harmonised.

The governance implications are equally important. Standards within government, covering budgeting, procurement and recruitment, are central to state capacity. Where hiring criteria are opaque and procedures inconsistent, policy delivery suffers. Here again, ambition must be calibrated. Over engineered reforms can overwhelm administrations. Iterative, evidence based approaches tend to work better than sweeping redesigns imported wholesale.

Perhaps the most provocative reflection comes when the report turns the lens inward. Development economics itself operates through implicit standards that often exclude scholars based in developing countries. The comparison with science and engineering is telling. High standards need not be exclusionary, but ambiguity and discretion can be. Precision, transparency and participation matter in knowledge production as much as they do in manufacturing or finance.

The larger lesson is that standards are already shaping development trajectories, whether governments acknowledge it or not.