The Roles of Standardization, Certification, and Assurance Services in Global Commerce

Abstract

Two of the major problems that permeate complex modern production and distribution enterprises are coordination and enforcement. While mechanisms of coordination have been studied extensively in management science and organizational economics, issues raised by the second set of problems have been the focus of microeconomic theory, organizational economics, and law, especially property, contract and business entity law (e.g., North, 1990). At least two major mechanisms of enforcement of business and commercial understandings and agreements - legal contracts, and the organization of activities within firms - have been studied at considerable length by scholars in the law and economics tradition (e.g., Coase, 1937; Williamson, 1975). More recently, a third cluster of mechanisms, including norms and reputation, have become an object of study by economists and legal scholars (Richman, 2004; Bernstein, 1996; Bernstein, 1992; Bernstein, 2001; Grief, 1989).

Professor of Law at Vanderbilt University Law School, Professor of Law at the University of Illinois College of Law, and JSD candidate at the University of Illinois College of Law, respectively. The authors have had the benefit of substantial research assistance from Everett Peaden, Bixuan Wu, Rebecca Conley, Brandon Martin, Yun Chen, Joshua Rosenblatt, Tracy Dry Kane, Lily Huang and Emily Kamm. We appreciate the comments of participants in the IEA meeting in Trento, Italy on Corporate Social Responsibility and Corporate Governance in July 2006; participants at faculty workshops at the University of Georgia Law School, the University of North Carolina Law School and Vanderbilt University Law School, participants in Prof. Stephen Bainbridge’s student workshop at UCLA Law School; and the participants in the University of Illinois and Sun Yat-Sen University School of Law, Guangzhou, China, conference on the Role of Law in Economic Development in March 2007. Particular thanks are owed to Ed Rock, Oliver Williamson, Mike Vandenberg, David Zaring, and John Conley for their careful attention to earlier drafts.