This chapter examines the dynamics of change in economic institutions in an emerging market economy. Empirically, I conduct a case study of change in economic institutions regulating the application and monitoring of industrial standards in Ukraine. I seek to explain why economic institutions in this policy field change and why they change selectively, albeit gradually?
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Notes
- 1.
As previously mentioned, the analysis will be limited to the Western influence.
- 2.
As early as 2000, 5 years before the EU and the Ukrainian government agreed to prepare ACAA negotiations, Ukraine started to work on harmonizing the standards of those four sectors that the country selected for the ACAA.
- 3.
These include (a) the Law of Standardization, (b) the Law on Assurance of Conformity Assessment, (c) the Law on Accreditation of Authorities of Conformity Assessment, and (d) the Law on Market Surveillance.
- 4.
For a definition of gradual change and an overview over its various patterns, see Streeck and Thelen (2005).
- 5.
Unfortunately, I do not know any study that analyses how a removal of technical barriers to trade would affect those companies that are currently producing only for the Ukrainian market but would need to prove conformity with EU standards as soon as the ACAA is concluded. It can be assumed that the percentage of production costs that Ukrainian manufacturers, who are currently producing only for domestic and CIS markets, would need to invest is significantly higher than the 4.4% of production costs that Ukrainian companies exporting machinery already to the EU market would save as soon as the industrial standards regime in Ukraine is aligned with the EU model (ECORYS & CASE 2007; Jakubiak 2006)
- 6.
These are standardization, certification, conformity assessment, and market surveillance.
- 7.
Again, there is no need to analyze to what extent the capacity of the supply side to change institutions explains the change in economic institutions in the Ukrainian case because actors will not use their capacities without incentives.
- 8.
For more information, consult the project’s homepage at http://www.ifc.org/ifcext/uspp.nsf/Content/Home, latest access on August 10, 2008.
- 9.
DSSU (2006).
- 10.
This concerns the Low Voltage Directive. The problem, however, is that Ukrmetrteststandard is still part of the Ukrainian regulator DSSU. In order to align with EU requirements, Ukrmetrteststandard has to be separated from DSSU.
- 11.
Since 1993, Ukrainian regulators have been cooperating with the International Standards Organization (ISO) and the International Electrotechnical Commission (IEC) due to the start of WTO negotiations. Cooperation with the European Committee for Standardization (CEN) and the European Committee for Electrical Standardization (CENELEC) started only in 2004 due to efforts by European experts working for the mentioned TACIS projects between 2003 and 2004. As a result, DSSU acquired the status of a partner authority with CEN and the status of an associate with CENELEC, in 2005.
- 12.
As previously mentioned, the World Bank Group launched a project aimed at improving Ukraine’s business environment pursued by the International Finance Cooperation (IFC) in 2001.
- 13.
The law is supposed to disentangle the premarket control of industrial products from the regulatory body and assign it to the manufacturers. It further released the regulator from pursuing inspections and assigns these tasks to separate public or private bodies. See European Commission (2005).
- 14.
DSSU introduced the Public Council following a Presidential Order of 2004 and a related Order of the Cabinet of Minister of Ukraine of May 2005. For more detailed information, consult DSSU’s homepage at http://www.dssu.gov.ua/control/en/publish/article/main?art_id=87458cat_id=87313, last accessed on August 10, 2008.
- 15.
The European Commission, however, plans to address Ukrainian companies through a number of TACIS projects in order to disseminate information from 2008 onwards (interview 8).
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Acknowledgments
I would like to thank László Bruszt, Ronald Holzhacker, Dorothee Bohle, Sabine Fischer as well as all participants of the European Research Colloquium on the Transnationalization of Economies, States, and Civil Societies: New Challenges for Governance in Europe, for their helpful comments on earlier drafts of this chapter. Further, particular thanks are owed to Michael Emerson, Ildar Gazizullin and Olga Shumylo, who helped in various ways during the research. The usual disclaimer remains.
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Langbein, J. (2009). The Transnationalization of Change in Economic Institutions: The Case of Industrial Standards Regulations in Ukraine. In: Bruszt, L., Holzhacker, R. (eds) The Transnationalization of Economies, States, and Civil Societies. Springer, New York, NY. https://doi.org/10.1007/978-0-387-89339-6_5
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