World Bank Document

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In the past few decades, changes in global trade fl ows have enhanced the 
role of quality and standards in economic development. Global trade 
fl ows have experienced changes with respect to their magnitude, nature, 
composition, and patterns. While the relative magnitude of trade fl ows has 
continuously increased, the nature of trade has been radically altered by 
the emergence of closely integrated global production networks. Shifts in 
trade composition have given a greater importance to manufacturing. Man-
ufacturing has replaced other industries to become the most important 
export sector in many developing countries, if not the most promising 
export sector. Patterns of trade have signifi cantly changed with the entry of 
developing countries in export markets for labor-intensive manufactures. 
However, an expanded presence of developing countries in global markets 
has not always coincided with rising economic returns, as intense com-
petition has eroded the profi tability of low-cost manufactures. All these 
changes have amplifi ed the importance of standards and quality in the 
world economy. Higher-quality markets have not been subject to falling 
profi tability and present a sustainable alternative to price competition.
In this book we argue the urgent need for countries to move forward 
aggressively on adopting and upgrading quality and standards. The focus is 
on developing countries, many of which are lagging in the race for standards 
adoption, and within that category, on middle-income countries. The book 
analyzes the economic impact of quality and standards on economic growth, 
on international trade, and as an entry point for the industrial upgrading and 
mainstreaming of small enterprises. It offers detailed guidelines for the cre-
ation of national quality systems that can effectively support the use and 
C H A P T E R 1

2 Quality Systems and Standards for a Competitive Edge
adoption of standards. It describes the optimal structure for a national qual-
ity system, evaluates the precise roles of the public and private sectors, and 
proposes best-practice guidelines and norms for these roles. It also addresses 
the fi nancing issue, including the extent of and rationale for targeted subsi-
dies, and questions of jurisdiction. Special emphasis is given to international 
integration through mutual recognition agreements that enhance access to 
external markets—a key objective for developing countries. 
The fi rst part of the book is generic and normative, providing empiri-
cal evidence and guidelines for reform. The second part describes and 
evaluates the performance of a number of Latin American countries 
with respect to various components of the national quality system. Latin 
America offers several good examples of countries that are moving ahead 
on quality and standards. Moreover, most countries in the region are 
choosing exports as the engine for growth, and for that to be successful, 
quality and standards are essential. Finally, the appendix presents case 
studies of Mexico and Turkey to illustrate the methodology of analysis 
for making a diagnosis and appropriate recommendations. 

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