Part V - Resilience in Technical Standardization

13 The International Organization for Standardization A Seventy-Five-Year Journey toward Organizational Resilience

Stephanie Bijlmakers

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13.1 Introduction

The International Organization for Standardization (ISO) has grown to become one of the world’s most influential standards development organization (SDO) since its creation in 1946 (formally in 1947). A main source of its influence resides in its epistemic authority and standard-setting capacity, reflected, among others, in the increasing number of International Standards and standard-like instruments it has developed over the years, totaling 22,913 by 2020.¹ These standards cover a wide spectrum of issues in the economic, environmental, and social spheres. These issues range from terms and definitions and the dimensions and physical interoperability of goods, to product and service quality and safety requirements, management standards, conformity assessment practices, social responsibility, and climate change.² ISO standards and deliverables have an important role in the global economy; their use can improve the efficiency of production, the dissemination of innovation and best practices, and facilitate trade and market access. ISO standards are voluntary in that individuals or organizations have no legal obligations to use or adhere to them.³ Nonetheless, ISO standards are influential in shaping global markets and the behavior of companies and organizations, including their management of environmental and social impacts, thereby affecting the conditions under which people live. ISO does not develop its standards with the intention to establish regulation, nor does it perceive its organization to engage in any rule-making activity.⁴ However, public authorities use and reference ISO standards in legislation and regulation and rely on them in support of public policy decisions and actions or as an alternative for regulation.⁵

ISO’s history and evolution has been well-documented in the literature. This chapter builds on this literature to illuminate how many changes within ISO’s organizational system and its standard-setting activities are a response to trends, changes and related challenges within the environment in which ISO operates. ISO’s evolution can be explained in relation to its ability to respond and adjust to meet these challenges, in order to ensure its continued relevance. While it is possible to examine ISO’s growth over the almost seventy-five years of its existence, this chapter posits that it is especially during crisis moments that ISO has undergone rapid transformation and change. During such decisive moments, the viability of the organization is threatened. The organization itself may be affected and its legitimacy and capacity to realize its goals questioned. Such organizational crises “require an urgent response by the organization under conditions of considerable uncertainty as to the precise causes and probable consequences of the situation at hand.”⁶

Kuipers and Wolbers distinguish between three types of crises: a crisis whose cause and problems both originate from within an organization, upsetting its primary process or performance; a crisis to an organization that is caused by an exogenous event or development but implicates the organization, having caused or allowed it to occur; and a crisis about the organization, or an institutional crisis, in the form of a perceived performance deficit becoming “so deeply problematic that the organization itself is subject to intense scrutiny and criticism.” According to the authors, “even the most tangible crises in organizations do not only prompt a functional response (putting out the fire, informing those directly affected), but have a political dimension too (regarding the legitimacy of the organization, and accountability for the problems and its functional response to the crisis).”⁷

This chapter adds to the existing literature an empirical account of how ISO has responded and transformed in connection to such critical moments throughout its history. ISO has experienced various and different types of crises compelling it to change. ISO’s continued existence and relevance despite and because of these challenges demonstrate its resilience as an organization. An analysis of ISO’s resilience is also justified at this moment, in light of the recent COVID-19 pandemic. ISO is considered to have demonstrated “agility, flexibility and solidarity” during this crisis.⁸ It seized opportunities to promote and rapidly disseminate existing ISO standards⁹ and initiated the development of new standards in support of the global effort in dealing with this pandemic. ISO promoted the International Standard ISO 22301 (updated in 2019) Security and resilience – Business continuity management systems as a dynamic tool that can assist businesses and other organizations in navigating through it.¹⁰

This chapter builds on the theoretical framework provided by Delimatsis¹¹ and tests some of its claims against the empirical findings. This framework captures how crisis moments present both challenges and opportunities for private or hybrid standard-setting organizations, such as ISO, to grow more resilient and more influential as an organization. When an organization experiences a crisis, its adaptability is put to the test. Such crisis moments create a need and incentives to respond and adopt strategies that activate internal processes of change to restore the equilibrium. Opportunities arise to accumulate knowledge and develop the capacity to expect the unexpected and absorb it. Resilience is viewed as “the capacity to absorb stress and reorganize after the occurrence of a disturbance that upsets the equilibrium.”¹²

This empirical study is based on eleven semi-structured interviews with officials currently or formerly working for ISO. Next to the empirical data collected from the interviews, this study is based on research of primary sources (ISO official documents, minutes of meetings, brochures, etc.) and secondary sources (mainly but not exclusively empirical studies about ISO).¹³

Section 13.2 explains the origins of ISO and its rise to prominence. Section 13.3 provides an illustrative example of ISO’s responses and adaptations to one of its first crisis moments, originating from the needs of its new member national standardizing bodies (NSBs) from developing countries, including ISO’s creation of its Committee on Developing Country Matters (DEVCO) in 1961. Section 13.4 identifies ISO’s most essential qualities, how ISO acquired or leveraged these qualities in face of crises, and their cultivation over time. Finally, the chapter concludes and reflects on ISO’s future (Section 13.5).

The empirical research points to several (external) events being of special importance in driving transformative change of the ISO system. This chapter identifies key crisis moments during which ISO was compelled to change, their drivers, and some of the resilience strategies enacted by ISO during these episodes. Discussing these events and their implications for ISO in detail goes beyond the scope of this chapter. The author therefore views merit in further empirical research on ISO’s organizational responses and adaptations to these crisis events and the internal dynamics behind decision-making and ISO’s enactment of resilience strategies.

The chapter finds confirmation in the empirical data for the claim that ISO’s core standard-setting capacity and flexibility, and specifically ISO’s ability to promulgate voluntary standards rapidly and to ensure their quality and diffusion on a global scale, is a key dynamic property of ISO. This property is essential for ISO to achieve its strategic goals and mission. It confers resilience onto ISO in the face of adversity and enables it to establish or expand its (relative) influence within and across various domains of standard-setting. The research also points to ISO’s institutional structure and its complexity and its continued adherence to certain governance principles founding this structure, along with its business model, as key strengths of the ISO system. These qualities render ISO stronger and more influential today, as it seeks to contribute to the realization of the United Nation’s (UN) 2030 global agenda for sustainable development and meeting the many global challenges under the seventeen Sustainable Development Goals (SDGs), thereby also ensuring its continued relevance.

13.2 ISO’s Origins and Its Growth in Strength and Influence

ISO was created in 1946, in response to a need for international standards that could support the economic recovery after World War II and facilitate industrial growth worldwide. At the initiative of the UN Standards Coordinating Committee (UNSCC), under the direction of Charles Le Maistre, sixty-five delegations representing twenty-five countries gathered at the London Conference in 1946. The first Statute and Rules of Procedure for ISO were drafted at this conference. ISO formally came into existence on February 23, 1947, after their formal ratification by the necessary fifteen countries. ISO succeeded the International Federation of the National Standardizing Associations (ISA); this main prewar standard-setting organization with a generic mandate had ceased to exist during World War II.¹⁴ ISO adopted many of ISA’s statutes and standard development procedures. ISO’s standard-setting work began in 1947 with the creation of sixty-nine technical committees. These committees were concerned with the development of technical standards. ISO’s approach to standard development was to harmonize existing “national standards,” to then recommend the re-implementation of the international standard nationally. The purpose of these international standards, referred to as “Recommendations” then, was to enable “industry to operate smoothly by having technical standards to refer to in order to harmonize terminology or ensure interoperability, exchange information, test performance etc.”¹⁵

ISO was legally established as a nonprofit association under Swiss law, with its main seat in Geneva. It was structured as a federation of NSBs, one representing each country in the world. ISO’s membership was made up of a heterogenous group of NSBs, whose statute (public/hybrid or private) and membership composition varied, depending on the country context. Decision-making within ISO was based on the principle of “one country, one vote.” ISO was given three official languages: English, French, and Russian. The ISO Constitution defined the organization’s institutional structure, consisting of a General Assembly (GA), a Council, a president, a vice-president, a secretary-general, and a treasurer. Members would meet once a year in ISO’s General Assembly (GA), its plenary organ. The secretary-general would oversee the secretariat, its executive organ, which coordinates the system and runs its day-to-day operations. The International Electrotechnical Commission (IEC) was formally integrated within the ISO structure by its constitution, treating it as an autonomous “technical division” within ISO.¹⁶

ISO experienced rapid growth in output from the 1960s onwards. An important transition facilitating this growth was ISO’s change of approach to standard development. That is, from harmonizing national standards, ISO moved to the direct development of international standards at ISO level.¹⁷ ISO’s renaming of the output of its technical work from “Recommendations” to “International Standards” in 1971 exemplified this change.¹⁸ ISO, as a developer of these International Standards, became directly involved in the international community by supporting international organizations in their efforts to facilitate trade by way of harmonizing technical regulations, in which reference could be made to ISO standards.¹⁹ This involvement increased as international trade grew and markets opened throughout the 1960s and 1970s.²⁰ ISO’s standard-setting activities accelerated in the 1980s after ISO began its development of product quality–related standards for an increasingly globalizing market. The scope of ISO’s standard-setting activities further broadened after that, to management and organizational issues, service standards, and conformity assessment practices. ISO standards now cover practically all technical and economic activities.²¹

13.3 Meeting the Needs of Developing Countries and DEVCO’s Creation

One of the first critical episodes ISO encountered after its creation was between 1950 and 1960, resulting in ISO expanding its membership from developing countries and adapting to accommodate their evolving needs and requirements. The so-called new countries had recently gained their autonomy or independence from their colonial rulers. They were aware that adherence to international standards was a quid pro quo to access international trade and supply chains.²² These developing countries were less interested in the “threads, bolts and nuts” that ISO standards had addressed previously and preferred ISO to develop standards on topics for which they required a solution.²³ ISO recognized that most countries in the world were developing countries and that these countries should have a say and actively participate in ISO in order for ISO to meet global needs and create globally relevant standards.²⁴ Against this background, and to the end of being able to identify and respond to the specific needs and requirements of developing countries in the fields of standardization and related areas, ISO created its Committee on Developing Country Matters (DEVCO) in 1961. A main objective of DEVCO was to provide a forum for discussion about all aspects of standardization and related activities in developing countries and the exchange and sharing of experiences among developed and developing countries.²⁵

Further organizational changes followed to meet this challenge of ensuring active involvement of ISO’s membership from developing countries. In 1964 and 1992, ISO created the new membership categories of “correspondent” and “subscriber” to facilitate their access in the ISO system. This status enabled developing countries to be informed about international standardization without having to incur the full costs of membership.²⁶ Changes were made to ISO’s governance structure to ensure that the ISO Council would have a fair representation of the various sizes of the economy. For instance, in 1980, the ISO Council passed a resolution recommending to member states that “when they make nominations to fill seats of Council … they should bear in mind that six members should be member bodies from developing countries.”²⁷ In 1985, ISO created the ISO Programme for Developing Countries (DEVPRO), to provide training on topics related to standardization, sponsorship to attend technical meetings, and manuals on technical matters related to standardization, free for use by developing country members.²⁸

The adoption of the WTO Agreement on Technical Barriers to Trade (the TBT Agreement) in 1994 created new impetus behind this effort.²⁹ Many of ISO’s members from developing countries belong to or operate under the policy direction of the public service of their countries, for instance, the Ministry of Trade and Industry. Most importantly, the TBT Agreement sets the requirement for WTO members that when having identified a need to regulate to fulfil certain public policy objectives, their technical regulation must be based on international standards, or the relevant parts thereof – if these standards exist or their completion is imminent (Article 2.4).³⁰ This harmonization of the development of technical regulations by use of international standards serves the TBT Agreement’s objective of ensuring that national regulations, standards, and conformity assessment procedures do not create unnecessary obstacles to international trade. The TBT Agreement also establishes criteria for the development of standards by NSBs through the TBT Code of Good Practice for the Preparation, Adoption and Application of Standards (the TBT Standards Code) in Annex 3 to this agreement, related to balanced representation of interests, coordination to avoid overlap, and the availability of the standards to the public.

ISO has responded to the TBT Agreement’s adoption by actively promoting the implementation of its provisions, of which certain aspects are of special relevance to developing countries.³¹ As an observer to the WTO Committee on Technical Barriers to Trade (the TBT Committee), ISO has been “aware and attentive” to the issues that arise within the WTO in relation to standard development.^{32, 33} An important development was the adoption by the TBT Committee of the six WTO principles that guide the development of international standards,³⁴ of which principle 6 requires WTO members to facilitate the effective participation of developing countries in international standardization. ISO has pledged alignment of its standard development processes to these principles. A response by ISO that can be linked to this change was ISO’s creation of a TMB task force to facilitate the participation of developing countries in ISO’s work.³⁵ ISO updated its Directives in 2003 to introduce provisions on “twinning,” that is cooperation between a developed and developing country, for instance, in leading a working group or a technical committee,³⁶ a concept that was expanded to “partnering” in 2007.³⁷

In September 2004, the ISO Council endorsed ISO’s first Action Plan for developing countries (2005–2010).³⁸ ISO’s Developing Countries Task Force (DCTF), created in 2002, had issued a report on developing a program of action to increase the immediate involvement of developing countries in ISO’s standard-setting work. A high-level ad hoc group was established in 2003 to study this task force’s recommendations relating to ISO governance, which resulted in ISO converting DEVPRO into a five-year Action Plan.³⁹ ISO’s first Action Plan covered the entire spectrum of ISO’s activities of interest to developing countries and structured these activities with five clear objectives.⁴⁰ This Action Plan was intended to more effectively link ISO’s organizational structure for developing countries to ISO’s strategy. It implemented those elements of the ISO Strategic Plan 2005–2010 relating to developing countries. This ISO Strategic Plan set out ISO’s view that support for developing countries is essential to realizing its global vision of contributing to a more efficient and sustainable world economy.

The first five-year ISO Action Plan for developing countries was in place from 2006 to 2010. Subsequently, a new Action Plan came into force every five years. These Action Plans are designed in consultation with ISO members from developing countries, to ensure the relevance and alignment of its programs with their needs.⁴¹ DEVCO monitors the Action Plan’s implementation. DEVCO’s terms of reference were reviewed to include this monitoring function, and ISO created the DEVCO Chair’s Advisory Group (CAG) to assist DEVCO in fulfilling this function.⁴² A key focus of the latest ISO Action Plan for developing countries (2021–2025) is the UN 2030 Agenda and the seventeen SDGs. ISO’s strategic plan for 2030 aligns ISO’s ambitions for 2030 with the SDGs, viewing standards as instruments, and their development as an opportunity for ISO, to contribute to their delivery and achieve a sustainable future. The Strategy is meant to ensure ISO’s position within a rapidly changing global context and the potential of standard-setting in realizing ISO’s vision for 2030, that is “making lives easier, safer and better.”⁴³

13.4 ISO’s Key Traits of Resilience

Section 13.3 provided an illustrative example of how a crisis episode created a need and incentives for ISO to respond and adapt in order to ensure the responsiveness of its International Standards to the needs of developing countries, their global relevance and uptake, and ISO’s continued relevance as an organization. ISO’s creation of DEVCO and other subsequent organizational changes strengthened ISO’s capacity and its position as a standard-setting organization in the face of future crisis events. As will be further illustrated, the adoption of the TBT Agreement, and its interpretation by the WTO Appellate Body, was a change in ISO’s (regulatory) context that had a significant impact on ISO. This event created opportunities for ISO to assert its competence and legitimacy as a developer of “relevant” international standards in contribution to the realization of the objectives of the WTO agreement, for its International Standards to obtain relevance and a legal status within the WTO regime, and to consolidate ISO’s (dominant) position in the standard-setting community.⁴⁴

The empirical research points to ISO having witnessed various such crisis moments throughout its history and related challenges driving transformative change within its system. Such crisis moments seem to have never affected ISO to such a problematic degree that the organization’s continued survival was truly at stake:

ISO has not had a significant institutional crisis, I’m happy to say, in the sense that over the years, internationally, ISO has been recognized as a very useful organization and has managed to adjust to the evolution of the international scene. Of course, there have been some adjustments and tensions.⁴⁵

The findings suggest that ISO successfully recovered and reorganized after experiencing a crisis moment. ISO’s ability to realize such internal organizational change attests to its resilience. As Section 13.3 showed, ISO has retained and acquired new capacities in face of crises that have rendered ISO stronger in the face of future threats, though issues remain.⁴⁶ This section identifies key strengths of ISO, draws linkages to crisis moments during which ISO acquired or built these capacities, and reflects on their cultivation over time.

13.4.1 Standard-Setting Capacity and Flexibility

The research provides empirical evidence for the claim that ISO’s core standard-setting activities and its flexibility are essential properties that have rendered ISO stronger in the face of adversity. ISO’s flexibility in the fulfillment of its standard-setting functions is apparent from certain shifts in ISO’s work over the years. The change in ISO’s approach to standard-setting from the harmonization of national standards to the development of International Standards in the late 1960s is a case in point.⁴⁷ ISO has also demonstrated an ability to enter into new domains of standard-setting by promulgating voluntary standards rapidly and to interpret its standard-setting procedures flexibly in face of changing stakeholder expectations about the ISO system. As will be illustrated, this evolution of topics has followed wider trends in society.⁴⁸ ISO’s ability to develop standards rapidly⁴⁹ was strengthened during an important episode in the 1980s when the organization was under pressure to self-organize to improve the efficiency of its standard development process.⁵⁰

ISO’s flexibility in standard-setting is evident from its shift in focus in the 1960s from technical standardization to the development of product standards, which relate to the performance, safety, and health aspects of products.⁵¹ ISO’s decision to promote consumer participation in its work was a consequence of its entry into this domain of standards.⁵² The products that were covered by these products standards were used by consumers (not industry) and impacted on their welfare.⁵³ Impetus to reconsider ISO’s structure to facilitate consumer participation came at a time when the consumer movement in the United States, under the leadership of Ralph Nader, had gained traction in the 1970s–1980s and demands increased for consumers to have a greater say in ISO’s policymaking and its standard-setting work. Against this background, ISO made a proposal that led to the decision of the ISO in 1977 to establish the ISO Committee on Consumer Policy (COPOLCO), which held its first meeting in 1978.⁵⁴

ISO’s publication of its first quality management system standards in 1987 marked another shift, away from performance standards toward process standards. ISO 9001 was adopted against the background of a proliferation of quality standards and big purchasers, including government wanting “zero defects” in the manufacturing of weaponry or nuclear power plants, imposing many different quality standards to avoid quality problems.⁵⁵

Rapid developments in the global high technology sector created opportunities for ISO to meet a demand for rapid standardization in the 1980s. ISO experienced competitive pressure from a proliferation of consortia and other types of standard-setting organizations developing “open standards” and “proprietary standards” for a global high-tech sector. ISO was criticized for its process of developing ISO standards being “too bureaucratic and slow”⁵⁶ and not responding to market needs. There were concerns that unless ISO improved its performance, international standards would be developed through other organizations, especially in these industry consortia, which could develop standards “in a faster and cheaper way.”⁵⁷ ISO standards could become less relevant to the need of industry and the world economy in general.⁵⁸

According to an interviewee, there were around 7,300 projects running in 1996. Many of these projects had been registered twenty, fifteen, or twelve years before. There were three projects with a lifespan of thirty years in the work programs of ISO committees. ISO had introduced a harmonized stage code system in 1993 for use to describe the process and indicate where in the process an item had reached. “I saw that there were projects that stayed for 5, 6, 7, 10, 15 years in the same stage. So, there was absolutely, in my opinion, no management of the technical program.” Addressing these problems posed challenges for the ISO; the experts participating in its technical work are volunteers, and ISO could not “dictate the speed of development or the making available of resources for ISO work.” “There was also no higher-level monitoring system across all the committees, the technical fields and so on to see all these problems.”⁵⁹

ISO created the Technical Management Board (TMB) in 1986, which after its first meeting in 1994, systematically addressed ISO’s problems. ISO put in place a new management structure to speed up the process for the preparation of standards. It stressed the need, in a decentralized organization like ISO, to strengthen the self-responsibility of the committee.⁶⁰ ISO introduced certain disciplines for project management: work programs of ten years and older were cancelled, unless a plan was developed to produce a Draft International Standard (DIS) within one year. ISO introduced clear rules for standard development, such as that requiring a work-item to reach a certain stage by a declared target date. When a committee failed to meet this target date, and could not justify this delay, the respective work-item would be cancelled.⁶¹

The adoption of ISO 14000 Environmental Management System (EMS) was another important milestone in ISO’s history. Various trends coalesced that pushed this project onto ISO’s agenda in advance of the UN’s 1992 Earth Summit.⁶² According to an interviewee, “environmental issues were becoming important to the point that there was a need to have a reference document internationally recognized to deal with how a company may be organized to achieve and demonstrate that it is working properly in relation to the environment.”⁶³ An important driver behind the development of the ISO 14000 series was the interests and need of industry, ISO’s traditional constituency, for a common international EMS standard and their preference for ISO to take a lead in its development, owing to their influence in ISO.⁶⁴ Importantly, developments in the General Agreement on Tariffs and Trade (GATT) negotiations indicated that States, which were unable to monitor and enforce compliance with the many environmental regulations, were willing to accept an approach of compliance with an EMS.⁶⁵ Industry believed that having a common international EMS standard could justify such an approach to legislation, which would bring “regulatory relief” to companies.⁶⁶

Around the turn of the century, ISO reoriented the strategic goals behind its standard-setting toward addressing the complex challenges posed by globalization and sustainable development.⁶⁷ ISO viewed global relevance for its voluntary standards as tools in supporting societal actors in meeting these challenges.⁶⁸ ISO 14000 was one of the first standards that marked ISO’s entry into the public policy arena. ISO further broadened the scope of its work from 2000 onwards, entering many other new areas of standard-setting, including “tourism, water distribution and sewage, financial services, IT services or health services.”⁶⁹ This expansion in ISO’s work program was a response “to current and new stakeholder needs” and was seen as essential for ISO “to maintain itself as a highly relevant international standards developer.”⁷⁰ Further institutional changes followed this shift in support of the delivery of these standards and to ensure the protection of public interests within the ISO system.⁷¹

With ISO’s decision to develop standards in support of sustainable development, whose content is of public interest, also came changing expectations about the ISO system and quests to legitimize its authority by ensuring the involvement of a broader group of stakeholders in its standard development procedures. This trend already took off with ISO’s development of the ISO 14000 standards series.⁷² The potential policy implications of ISO 14001, addressing environmental aspects of organizations’ activities, raised its importance to NGOs. ISO was criticized for the underrepresentation of environmental NGOs in the TC 207 process, especially in the early stages.⁷³ This resulted in varying and increasing efforts by NSBs to engage environmental NGOs at the national level.⁷⁴ ISO approved “ISO Long-Range Strategies 1999-2001,” expressing its commitment to “balanced representation,” including to ensuring “more effective representation of consumers and of other social forces’, and its concern about the ‘transparency of [ISO] activities.”⁷⁵

ISO experimented with a novel construct and an approach to direct stakeholder involvement in its technical work at the ISO level in its development of ISO 26000.⁷⁶ This out of the box project demonstrated ISO’s ability to interpret and apply its ISO/IEC Directives and rules for standard development flexibly; ISO 26000 was developed within a Working Group (not a technical committee), through an intense multi-stakeholder process that engaged subject matter experts from six stakeholder groups, acting in their own capacity (not as representatives of their NSBs or governments). ISO also signed Memoranda of Understanding with the ILO, GRI, and SAI to coordinate its work with these organizations and to facilitate their participation and expert input into the process.⁷⁷ ISO opening up its standard-setting process to include a broader range of stakeholders can be viewed as a resilience strategy. ISO has not applied a similar process and multi-stakeholder approach in its standard-setting work since. This was despite NGOs considering this approach a “major improvement”⁷⁸ and calling for ISO to broaden it to cover all ISO TC work in similar areas of fundamental interest.⁷⁹

In 2008, that is, before the publication of ISO 26000 in November 2010, the TMB decided to form a mechanism in the form of a Process Evaluation Group (PEG) to investigate the responsiveness of ISO’s standard development processes to changing dynamics. The experience of ISO 26000 informed this investigation.⁸⁰ The PEG’s investigations resulted in the publication of two ISO brochures: Guidance for Liaisons⁸¹ and Guidance for NSBs.⁸² These brochures confirm and uphold the commitment of the ISO system “to participation via national standards bodies, as well as through the consideration of the input received from liaison organizations.” ISO sought to “safeguard the outcomes of the ISO system and to promote the existing value, strength and authority of International Standards and the processes by which they are produced.” ISO also alleged that “the existing ISO model works well, is well defined and is accepted by stakeholders.”

ISO’s approach to stakeholder involvement in its standard-setting work has thus remained unchanged in essence; ISO ensures stakeholder representation via two streams, that is, through NSBs and organizations in liaison with ISO committees.⁸³ “ISO/IEC Directives are reviewed each year and small incremental changes have been made to the standard-setting process to improve stakeholder engagement and to ensure that the process keeps meeting the needs of those involved.”⁸⁴ ISO’s standard development relies on the input from these stakeholders that view ISO as carriers through which they can influence how industry operates and bring in their own competence and experience. The involvement of diverse stakeholder interests also creates conditions of legitimacy,⁸⁵ enables ISO to foster acceptance, and facilitates the widespread diffusion of its standards and deliverables.

13.4.2 Coordination of Activities through Partnerships

ISO has demonstrated an ability to establish connections and coordinate its work with other organizations in support of the realization of its goals. ISO’s recognition of having consultative status in the UN, and its cultivation of this recognition since the 1970s, is said to have been key to ISO’s strong position in international standardization. “As early as the 1970s, the ISO Council decided ‘that ISO should continue to overcome problems of conflict of competence with other international organizations through direct contacts with the latter.’”⁸⁶ Over time, ISO has sought to partner as much as possible, which is reflected by the different types of relationships ISO has entered into with other organizations.⁸⁷ ISO’s involvement in the SDGs resulted in ISO renewing existing and creating new partnerships, including with the UN.⁸⁸

An illustrative example of a crisis moment that ISO managed through cooperation was the EU’s adoption of a “new approach” to EU legislation in 1985.⁸⁹ This new approach meant that EU Directives would set essential requirements that products and services placed on the community market must meet and rely on voluntary, consensus-based European standards to provide the technical specifications to implement and verify conformity with these requirements. Products manufactured in compliance with these standards are presumed to be in conformity with essential requirements of EU legislation. European standards are defined as technical specifications adopted by a European Standards Organization (ESOs).⁹⁰ This approach recognized the role of European standardization in supporting public policy objectives and, in particular, the creation of the Single European Market. It called for “a considerable expansion of European standardization activities, diverting a significant amount of interest and resources away from international standardization work.”⁹¹ This posed challenges to ISO in that the key European players in ISO at that time (Germany, France, the United Kingdom, and Italy) withdrew their resources and focused on European standardization instead. This gave rise to the question of how ISO could continue to be relevant while at the same time being so dependent on key standard-setting bodies from Europe.⁹²

ISO responded by signing the Vienna Agreement with the European Committee for Standardization (CEN), its European equivalent, which was formally approved in 1991 (and revised in 2001) and issuing common guidelines for its implementation.⁹³ The Vienna Agreement governs technical cooperation between ISO and CEN, with the aim to avoid duplication and increase the efficiency of standardization at the international and European level. It recognizes the primacy of international standards and offers the opportunity for a joint development of standards, the exchange of information and mutual representation at meetings, and the recognition of the same standard as an ISO and European standard. Either CEN or ISO can take the lead in developing a standard, which will then be presented for approval by both organizations. A Joint ISO-CEN Coordinating Group of the Technical Boards consisting of representatives of both organizations was created to monitor application of the Agreement and to advise the boards of both ISO and CEN on issues relating to the agreement.⁹⁴

13.4.3 Alignment of Principles with Strategic Goals

ISO has demonstrated an ability to align its principles of governance⁹⁵ with the strategic goals and priorities of the organization, which ISO has adjusted over the years in response to changes in its external environment.^{96, 97} This alignment has affected the evolution and resilience of the organisation, as the following crisis moment illuminates.

ISO’s adoption of the TBT Agreement in 1994 created both risks and opportunities for ISO to grow in strength and influence. More specifically, it created opportunities for ISO to demonstrate its relevance (and legitimacy) in contributing to freer trade by reducing barriers to trade and realizing the goals of the WTO. The TBT Agreement did not expressly recognize ISO, or any other standard-setting organization, as a developer of “relevant international standards” for the purpose of Article 2(4). Amidst debate about whose standards could be utilized for this purpose, ISO was among the organizations most likely to qualify.⁹⁸ ISO had risen to authority and acquired credibility and a dominant position in standardization at the time of the TBT Agreement's adoption.⁹⁹ Also, there was synergy between ISO’s governance model and the terms in the TBT Agreement, which had adopted these terms from ISO/IEC Guide 2: 1991,¹⁰⁰ with some modification (Annex 1).¹⁰¹ Moreover, the purpose of ISO standards to facilitate international trade aligns with that of the TBT Agreement.¹⁰²

The adoption of the TBT Agreement created incentives on the part of ISO to respond and adapt to ensure its continued relevance and to build and maintain its legitimacy within the WTO regime.¹⁰³ This meant meeting the evolving requirements of the TBT Agreement, as interpreted by the WTO Appellate Body. ISO confirming adherence of its standard development process with the six WTO principles, shortly after the TBT Committee’s adoption of these principles in 2002, was an important response. ISO also claimed that ISO and its NSB members adhered to the disciplines of the TBT Standards Code.¹⁰⁴ ISO has taken various reform initiatives in response to developments in the WTO, which have enabled the further recognition and implementation of the WTO principles in its governance structure and technical standard-setting work, with a special focus on enhancing the effective participation by developing countries and engaging a broad range of stakeholder interests.¹⁰⁵

ISO further aligning its governance principles with the WTO principles and disciplines, for the purpose of facilitating international trade, can be interpreted as a resilience strategy.¹⁰⁶ For instance, in 2003, ISO approved a definition of global relevance and a set of principles and implementing guidance to ensure the global relevance of its technical work and publications.¹⁰⁷ This was in response to the TBT Committee’s decision that an international standard should meet a set of seven criteria in order to meet the WTO principle of “relevance.”

ISO’s alignment of its own principles of governance with the WTO principles has affected stakeholder perceptions of ISO and has led to increased social sensitivity and scrutiny of ISO’s performance against these principles. As illustrated above, ISO standards are influential in shaping economic activity and take on de facto or de jure binding effects when referenced, and rendered mandatory, under national regulation and international regulation.¹⁰⁸ This increasing influence of ISO standards, also in relation to the state, has raised concerns among NGOs. According to an interviewee, critical studies by NGOs and academics scrutinizing ISO procedures against its standards¹⁰⁹ have caused ISO to reflect and “to become more principle oriented, and to implement these principles in practice to the extent they can or are willing.”¹¹⁰ Illustrative is ISO’s adoption of the ISO code of ethics in 2004. This code expresses the commitment of ISO members and each of ISO’s organizational entities to ensuring fair and responsive application of a set of principles (“due process, transparency, openness, impartiality and voluntary nature of standardization”), which mirror the WTO principles.¹¹¹

ISO has relied on adherence to the WTO principles to instil confidence by public regulators that when using ISO International Standards in support of their policy decisions and actions, ¹¹² they are not creating unnecessary barriers to trade.¹¹³ ISO emphasizes in its communication to public regulators that they can be confident they meet their obligations under the TBT Agreement when using ISO standards as a basis for their technical regulation and that the standards they use are globally relevant.¹¹⁴ The reliance by public regulators on ISO standards to avoid technical barriers to trade has further increased the significance of ISO’s work.¹¹⁵

Adherence to the WTO principles has enabled ISO to distinguish itself from other standard-setting organizations. It has aided ISO to consolidate its position as a dominant global standard-setter in areas of standardization in which it is the sole standardization body and to expand its influence in specific domains in which more organizations develop substitutive standards and are thus more competitive, such as sustainability standards. In 2014, ISO issued a brochure in which it differentiates its ISO International Standards from “private international standards” developed by other standard-setters.¹¹⁶ ISO relies on the argument that ISO standards and those of its members are developed through processes that use the WTO principles and disciplines and therefore are “superior” to “private” standards by other organizations that are not developed according to these principles.¹¹⁷

13.4.4 Institutional Setup, Complexity, and Governance Principles

ISO’s institutional structure was established at its creation, and while it retains its core, it has grown more complex.¹¹⁸ ISO has adapted its statutes in response to (geopolitical) changes and challenges in its environment.¹¹⁹ ISO created policy committees to provide forums to include the perspectives of developing countries (DEVCO) and consumers (COPOLCO) into ISO’s decision-making. ISO created CASCO to provide guidance on conformity assessment.¹²⁰ In addition, ISO created a President’s Committee to advise the Council on matters decided by the Council, four Council standing committees, and Advisory Groups to advise ISO on matters relating to commercial policy and information technology. The mechanisms ISO built into the system in order to give application to its governance principles further adds to its complexity. ISO’s institutional structure and its complexity is an important feature that ISO can harness in its crisis responses.¹²¹

ISO has never revisited the governance model that was chosen for the organization at its creation. ISO has continued to adhere to certain core governance principles founding its institution. Adherence to these governance principles is meant to ensure, inter alia, neutrality in ISO’s institutional setting, thereby protecting against the risk of abuse of dominant positions.¹²² More specifically, ISO’s institutional structure, and in particular ISO’s adherence to the national delegation principle and its one-country-one-vote modality, serves to protect against the risk of undue influence of individual NSBs within the organization and capture by certain country interests. Moreover, the requirement that ISO standards reflect a consensus between all parties affected by the standard, and that the standard development process seeks to balance the interests of these parties, serves to prevent a single interest from dominating the standardization process. It follows from ISO’s definition of a consensus that its members can reach an agreement on standards despite opposition by a particular interest (e.g., dominant firms, leading states, or states acting together, like those belonging to the EU).¹²³ ISO’s continued adherence to its governance model and its underlying principles is an important strength, and ISO derives legitimacy from it.¹²⁴

Whether ISO achieves neutrality in its decision-making and standard-setting work in practice is subject of discussion. ISO was and still is perceived as a business-driven organization.¹²⁵ The degree of influence of NSBs in standard development varies depending on their membership rights, roles, capabilities, and preferences. The barriers facing developing countries to effective representation and participation in ISO’s technical standard work, and to influencing the content of ISO standards, are well documented.¹²⁶ NGOs have criticized how decision-making in ISO is unbalanced in practice and dominated by private industry interests (especially in industrialized countries). As illustrated above in connection to the development of ISO 14000 and ISO 26000, ISO has adapted to internal dynamics and pressures, inter alia, by creating multi-stakeholder committees to advise on ISO’s involvement in new areas of standard-setting, by interpreting ISO standard-setting rules flexibly and investing resources to create opportunities for more balanced stakeholder representation and participation. Nonetheless, issues of (un)equal access and influence remain and result in NGOs and other stakeholders to deny ISO legitimacy.¹²⁷

ISO’s ability to withstand pressure from within its membership to make changes to its institutional setup and governance principles attests to its resilience. An illustrative example is how ISO has resisted challenges by the United States, an influential member with a long tradition in standardization, at several occasions, in what can be interpreted as attempts by the United States to exert a dominant influence within ISO.¹²⁸ For instance, the United States has challenged the representation of EU countries within ISO. A concern by the United States has been that the EU countries benefit from the one-country-one-vote modality, and that the EU has gained economic advantage by dominating the ISO process. According to an interviewee, after the creation of the EU internal market in 1993, the EU was perceived as an economic block. Since the EU had been formed as such, with its ESOs – CEN was viewed as a counterpart of ISO in terms of scope – the United States argued that the EU should be represented as such, that is, through CEN, and not the individual member countries. This attempt failed “because of the realization that the individual EU members were an asset for the organization.” The one-country-one-vote modality and the representation of EU countries within ISO remain unchanged.

It seems that giving into these pressures and departing from its governance model can pose a risk (of capture) to the organization and have implications for ISO’s attractiveness as a forum for standard development, especially in the view of NSBs and governments.¹²⁹

13.4.5 Business Model

Another key property that aids ISO in its navigation through crisis episodes is its business model, which ensures that the ISO system can access and leverage resources to achieve its objectives and recover its costs. ISO International Standards are not available for free in the public domain and ISO asserts and maintains copyright in International Standards.¹³⁰ It follows from ISO’s business model that the activities of the ISO secretariat are funded through the membership fees paid by NSBs (“which give them the right to participate in the International Standardization process, to use, nationally adopt and sell the International Standards produced”) and the sale of International Standards. ISO members bear the costs of running the secretariats of the technical committees. The expenses of experts working on the technical committees are borne by their employers or themselves. ISO views the financing of its system through the sale of its standards as fair: “the user who wants to benefit from a standard pays to use it.” ISO also claims to be “constantly looking for new ways to improve access to standards, while ensuring that the costs of developing them can be recovered.”¹³¹

An event within ISO’s history that implicated ISO’s business model and strengthened its resources (and its authority) was the adoption of ISO 9001. The publication of ISO 9001, and especially the opportunities that the extra source of revenues from the sale of this standard created, resulted in ISO reflecting on how to further finance standardization and expand the scope of the organization. ISO came to rely more on the sale of standards and less on membership fees to generate an income for the organization. The sale of this standard also supported further evolutions within both ISO and its NSB members. According to an interviewee, the publication of the ISO 9000 series resulted in NSBs expanding their activities “both in terms of standards development, because this was bringing additional resources to support finance, and then expand also the scope of the activities, going into at some point training activities, training, consulting services. Some became actually fully independent organizations, which was quite an interesting evolution.”¹³²

ISO’s model of financing has created both challenges and opportunities for ISO. According to ISO, it keeps participation costs down and allows for the broadest possible stakeholder participation. As is well known, however, developing countries have fewer resources and technical capabilities than developed countries to exert influence, especially at the technical standard-setting level. In fact, developed countries remain most active in leading technical committees and subcommittees in practice. Chairpersons and secretaries may be required to act in a “purely international capacity,” and experts participating in standard-setting, at least at working group level, in a personal capacity.¹³³ However, in practice, these individuals have had difficulty making decisions independently from the interests of their employer (who funds their participation in the process) or the NSB (who appoints them).¹³⁴ ISO’s claim that, because of its financing model, its International Standards are developed in a neutral environment without undue influence from individual sponsors¹³⁵ is debatable.

According to an interviewee, the revenues obtained from the sale of standards enables ISO to develop standards, to better promote ISO’s work, and have a broader scope. ISO’s pricing policy has had implications for the relevance of its standards (and its claim for authority), especially in the ICT domain.¹³⁶ Upon its entry into the domain of sustainability, ISO has been challenged by criticism that charging money for ISO standards whose content is of public interest is inappropriate and creates barriers to acquisition, and pressure to make them available in the public domain, free of charge.¹³⁷ ISO’s pricing policy can be a particular concern to States that reference International Standards in their legislation. ISO’s adjustments to its pricing policy in relation to certain standards in specific contexts, to the extent needed to ensure stakeholder support and realize its mission, demonstrate its flexibility. More generally, however, ISO has demonstrated resistance to pressure to adjust its financing model.¹³⁸ ISO’s responses and ability to retain its business model despite these pressures attests to its resilience.

13.5 Conclusion

This chapter examined how ISO has evolved and grown more resilient, and influential, over the course of its seventy-five-year existence, in relation to crisis. An assumption is that ISO’s evolution and resilience can be explained in relation to the continuously evolving environment in which it operates. It finds that the ISO system is flexible and adaptable to account for changes and to meet related challenges within its environment, in order to ensure its continued relevance. This chapter focused on ISO’s responses and adaptation during crisis moments when its resilience was put to the test. It finds that ISO has experienced multiple and different types of crisis events; however, developments have never cumulated to a point where ISO was subject to an (institutional) crisis of such problematic scale that its continued existence was truly in jeopardy.

The chapter provides empirical evidence for the theoretical proposition that ISO’s core standard-setting activities and its flexibility are key dynamic properties that render ISO stronger in the face of crisis. ISO has demonstrated a capacity to expand quickly to include new members from across the world, and in doing so, also the potential global reach and use of its standards. It has also demonstrated an ability to identify and enter into new areas of standardization and to rapidly promulgate and disseminate voluntary standards while ensuring their underlying potential and quality. ISO’s ability to align its principles of governance and the value and impact of its standards with the strategic objectives behind its standard-setting work, and trade facilitation in particular, is an important trait. ISO has proven able to interpret its rules and procedures flexibly to meet changing expectations in stakeholder involvement and to experiment and draw lessons from previous experiences. ISO’s institutional structure in conjunction with its complexity, and its continued adherence to the governance principles founding it, confers strength onto ISO. ISO’s ability to safeguard these principles, and its continuing adherence to its business model, despite and because of criticism and pressure, attests to its resilience. Most importantly, this study showed how ISO has built these qualities by overcoming adversity during crisis moments, and how these qualities shape ISO as an organization and its resilience today.

Overall, the interviewees point to the aforementioned qualities of ISO as strengths, giving optimism for ISO’s future. These qualities render it stronger and more influential today, as it seeks to ensure its continued relevance in contributing to the delivery of the UN 2030 global agenda for sustainable development and meeting the many global challenges that appear in the seventeen SDGs as part of this agenda. The interviewees highlighted opportunities offered by the SDGs to promote ISO’s existing portfolio and to expand into new domains of standard development to resolve these global challenges, which facilitates further growth. New challenges abound as ISO might lose in influence to other organizations that, mainly because of their specialized expertise, can act more efficiently and swiftly in identifying and responding to the needs of users in the domain of sustainability standards. In this light, future research could examine how ISO has grown resilient through competition with other actors, claiming authority through its standard-setting activities, and offering the most attractive institutional setting for the development of standards.

14 Global Rivalry over Leadership in ICT Standardization SDO Governance amid Changing Patterns of Participation

Justus Baron and Olia Kanevskaia

14.1 Introduction

Recent years have witnessed geopolitical tensions resulting from China’s rapid ascension to technological power. The increasing technological influence of Chinese companies is particularly apparent in the development of global technology standards in information and communication technologies (ICT). ICT standards codify specifications for interoperability among various technological components and prescribe methods applied in electronic devises;¹ notable examples include wireless LAN specifications, internet protocols, and cellular networks such 4G/LTE and, more recently, 5G.

Influence over the development of ICT standards is potentially highly valuable to commercial stakeholders – inclusion into a standard may increase the value of certain patented technologies;² and standard specifications may provide certain firms’ products with a competitive advantage. Competition for leadership in ICT standards development has thus long been characterized by rivalry between large commercial stakeholders. At the same time, and with the significantly increasing participation of Chinese companies in many standards development organizations (SDO), there is a growing geopolitical dimension to this commercial competition.

Particularly in the United States, the important role of Chinese companies, most notably Huawei, in ICT standards development has fueled a variety of policy initiatives intended to curb the influence of Chinese actors and bolster the position of US stakeholders in international standardization. To illustrate, US government officials have testified that the increasing number of SDO leadership positions held by Huawei affiliates may enable the adoption of standards that disadvantage the market position of US companies.³ The growing representation of Chinese companies in SDOs was also discussed in the proposals for the recent US Innovation and Competition Act.⁴ More recently, the National Institute of Standards and Technology (NIST) has been tasked to study and provide recommendations with respect to the effect of China’s standardization policies on, and the engagement of Chinese stakeholders in, international SDOs, especially those developing standards for emerging technologies.⁵

These policy initiatives furthermore take place in the context of allegations that Huawei and other Chinese technology companies may present risks to US national security interests. In this light, some Western countries, including the United States, adopted a number of restrictive measures, ranging from the bans on (telecommunications) equipment supplied by Chinese manufacturers and that pose a threat to national security,⁶ to Huawei’s listing on the US Export Administration Regulation (EAR) entity list, prohibiting it from supplying components for essential communications infrastructure.⁷ Also these tensions have not gone unnoticed in SDOs, not least because restrictions on the exchange of technical information with entities on the EAR entity list may preclude Huawei’s affiliates from taking part in certain activities of the standardization process.⁸

It has long been recognized that ICT standards can have significant political implications and can be used as tools of national or regional industrial policy.⁹ Leadership in the development of international ICT standards may thus provide opportunities for “regulatory export,” a strategy of promoting the international diffusion of domestic regulations. It is thus not surprising that policymakers view the possibility of Chinese stakeholders acquiring significant influence over ICT standards development as a particular cause for concern.

In this chapter, we argue that the tensions that result from China’s, and in particular, Huawei’s increasing representation in standardization processes, as well as the policy reactions that they generated, create “a moment of stress”¹⁰ for the normal functioning of SDOs. In addition to causing frictions in the daily business of SDOs, these dynamics challenge seemingly well-established governance principles of the standardization ecosystem.

Scholarly commentary has highlighted institutional features of SDOs, such as the openness and transparency of technical deliberations, the representation of a wide diversity of interests, and the fact that technical decisions are reached by consensus,¹¹ which seem to counter the suggestion that certain Chinese stakeholders may exercise undue influence within these SDOs to negatively affect US national security interests. Nevertheless, the recent tensions around increasing Chinese participation in SDOs expose fragilities in the existing norms of SDO governance. All this calls for an empirical analysis of SDOs’ governance processes to better assess these organizations’ aptitude to adapt to the present situation of institutional crisis.

This chapter aims to advance the understanding of the current power dynamics in SDOs by explaining the rules, processes, and traditions of four global SDOs, namely: the International Telecommunication Union (ITU), 3rd Generation Partnership Project (3GPP), Institute of Electrical and Electronics Engineers (IEEE), and the Internet Engineering Task Force (IETF). The reasons for selecting these SDOs are the following: firstly, they span across the spectrum of SDO governance models, ranging from an intergovernmental agency to an informal group of internet experts. Secondly, they have recently sparked off the debates regarding the increasing role of Huawei, and Huawei’s affiliates, in their standardization decisions. In particular, our analysis focuses on the rules for leadership appointments and expected conducts of individuals holding critical positions in SDOs. In a broader sense, this chapter contributes to the debate on the neutrality, independence, and trustworthiness of SDOs in the light of the global commercial and geopolitical rivalry in the ICT sector.

14.2 The Rise of China and Huawei as Global Technology Leaders

Over the past few years, participation by Chinese individuals and organizations in international ICT standards development has significantly increased.¹² Two factors have contributed to this evolution: first, the fast growth of the Chinese ICT industry and, second, structural and institutional changes in China’ national industrial and technology policy,¹³ often categorized as an evolving process of “techno-nationalism.”¹⁴ Chinese industrial policy had long sought to reduce dependence of China’s companies on foreign technologies through the development of indigenous alternatives to Western standards, for example, for 3G (TD-SCDMA) and 4G (TD-LTE) technology.^{15, 16} Current Chinese standardization policy by contrast incentivizes Chinese stakeholders to participate in the development of international technology standards:¹⁷ the recent “China Standards 2035” initiative, for instance, encourages Chinese stakeholders to lead the development of global standards for critical telecommunications technologies as well as for emerging technologies, such as artificial intelligence.¹⁸

It is against this backdrop that the aforementioned claims of China’s increasing influence in SDO processes arise. However, for any further discussion regarding the resilience of these processes, it is important to assess these concerns in light of empirical evidence.

14.2.1 Empirical Evidence on Chinese and Huawei’s Participation in SDOs

Our data suggests that the increasing Chinese participation in international SDOs is reflected in a general increase in the share of Chinese individuals among attendees of international SDOs, such as 3GPP, IEEE-SA 802.11, and IETF.¹⁹ Nevertheless, individuals from Western countries continue to represent a significant majority of the attendees in each of these SDOs (Figure 14.1).

Figure 14.1. Trends in SDO meeting attendance

Earlier studies demonstrated that increasing Chinese participation in SDOs has translated into an increasing share of Chinese stakeholders in SDO leadership positions, most notably in the intergovernmental ITU,²⁰ where it has also introduced a large number of standardization proposals.²¹ In the past decade, the number of Chinese stakeholders holding secretariat positions in the International Organization for Standardization (ISO) and the International Electrotechnical Commission (IEC) technical committees has increased by nearly 70 percent.²² However, the recent number of leadership positions held by Chinese stakeholders in the technical bodies of ISO and IEC seems not have increased dramatically or even declined, despite the fact that China has undertaken new chair positions and secretariats in these SDOs.²³

A similar observation can be made from our data: at 3GPP, IETF, and IEEE 802.11, the share of Chinese individuals among SDO working group chairs significantly trails the share of Chinese among attendees, demonstrating no disproportionate representation of Chinese individuals in the leadership of these three SDOs (Figure 14.2).

Figure 14.2. Trends in chairs appointments of SDO meeting

One must note, however, that most policy discussions focus specifically on Huawei. In this regard, our empirical evidence suggests that while individuals from Europe and North America are affiliated with many different organizations, the affiliations of SDO participants from China are significantly more concentrated, with Huawei holding a disproportionate share. As a consequence, Huawei was, in the most recent years, the single affiliation with the largest number of attendees in each of these SDOs. Similar to other large companies, Huawei affiliates are generally over-represented in working group chair positions (Figure 14.3).

Figure 14.3. Meeting attendance and chair appointments of five largest stakeholders in 3GPP, IEEE, OneM2M, and IETF

Furthermore, in different SDOs, Huawei-affiliated individuals have been appointed to particularly influential roles. In ITU, this included the chair of important committees, such as ITU-T SG16 on AI-enabled multimedia applications and ITU-T Focus Groups on AI standardization.²⁴ Individuals affiliated with Huawei or associated companies have also been nominated for the IETF chair election in 2021.²⁵

The empirical evidence also suggests that Huawei is not unique in holding large numbers of leadership roles in these SDOs. At 3GPP, Ericsson, Nokia, and Qualcomm also hold larger number of leadership positions; while at IETF, Cisco continues to hold a leading position both in terms of attendance records and chair positions. Empirically, what sets Huawei apart from its main competitors is the breadth of Huawei’s engagement – Huawei’s lead in attendance records in the three SDOs marks the first time that one company leads attendance counts in each of these SDOs. Furthermore, the observable data point to future increases in Huawei’s position in SDO leadership: as Huawei affiliates attend SDO meetings more assiduously than affiliates of any other company, and Huawei recruited far larger numbers of individuals with previous SDO participation experience than any other company,²⁶ Huawei is growing a workforce with significant SDO experience. Having this experience is the most important predictor of future appointments to SDO chair positions.

14.2.2 Huawei’s Rise as a Moment of Stress for SDO Governance

The observable pattern of Huawei’s increasing influence in ICT SDOs alone does not constitute an institutional crisis. Several concerns and/or allegations have been raised, which suggest that Huawei’s rise represents a challenge to the (current) normal functioning of international SDOs.

First, governmental support of Chinese companies, arguably enabling them to gain competitive advantages in SDOs, is accused of interfering with the competitive process.²⁷ Second, the increasing role of Chinese stakeholders, coupled with generally lower standards of patent protection in China, is often presented as a threat to the protection of Western companies’ patent rights.²⁸ Third, Huawei and other Chinese stakeholders are seen as promoting certain governance models for the development of ICT standards. To illustrate, Huawei-driven attempts at the ITU to reform the Internet with the “New IP” protocol have been presented as a challenge not only to IETF’s traditional prerogative over the development of internet protocols but more generally to a nongovernmental, de-centralized, multi-stakeholder model of standards development and internet governance.²⁹

In addition to these specific issues, concerns about China’s and Huawei’s influence in SDOs unfold against the background of a broader discussion on China’s role in the global economic order. ICT standardization, for example, in the field of Artificial Intelligence, carries complex ethical implications;³⁰ and some ICT standards, including 5G, define the performance and resilience of a critical communications infrastructure.³¹ In this context, several policy discussions around China’s and/or Huawei’s leading role in ICT standards development, and the telecommunications infrastructure more generally, focus on potential risks to national security interests, human rights, or political values; as exemplified by multiple cybersecurity incidents allegedly linked to Huawei³² and unease about the leading role of Chinese stakeholders in the development of international facial recognition standards.³³

The US policy response to these (perceived) threats to the SDO ecosystem can equally be seen as menacing the normal functioning of SDOs. The exclusion of certain entities from relevant standardization activities and adjacent forms of technology exchange represents a departure from the general principle of openness of the standards development process. Ultimately, it also risks splintering the technical and governance structure of international ICT standardization. Furthermore, at least some of the measures contemplated in the United States in order to counter Chinese influence in international SDOs can themselves be perceived as interference of a national government with the normal competitive process in private international SDOs.

14.2.3 Fragility of Existing Norms of SDO Governance

The recent tensions around China’s and Huawei’s increasing participation in the leadership of SDOs developing international ICT standards constitute a “moment of stress” for SDO governance, as both the rising influence of Huawei (and some other Chinese stakeholders) itself as well as the policy response (especially in the United States) to this ascension can be seen as challenging certain institutional norms and governance principles of SDOs.

ICT standardization is characterized by rivalry between different commercial stakeholders with vested interests in influencing the outcomes of standardization processes; it also involves considerable R&D investments. In this highly competitive setting, most SDOs emerge as nongovernmental, nonprofit, voluntary professional and/or industry associations that provide an infrastructure for neutral and nonpartisan deliberation processes. The primary aim of this particular institutional organization of the deliberative process is to promote technical objectivity in standardization decisions.

It is an accepted (and often expected) feature of SDOs that most or all individual participants of the standards development process vigorously pursue different interests. By contrast, it is a violation of institutional norms of standardization if the SDO itself or its agents or representatives side with individual SDO stakeholders or constituencies.³⁴ From this vantage point, the resilience of the existing SDO ecosystem to the present “moment of stress” hinges on whether the rival commercial and political interests of Chinese and Western stakeholders fuel particularly vigorous competition within the nonpartisan standards development process or whether there is competition for opportunities to influence (and bias) the nature of the deliberative process.

Nevertheless, the supposedly well-established norms separating the partisan activity of SDO participation from the neutrality of the institutional setting are inherently fragile. There have been numerous episodes in which individual SDO chairs have been accused of favoring their company’s proposals or otherwise biasing the standardization process.³⁵ At several occasions, SDOs made decisions opposed by significant stakeholder constituencies, illustrated by the W3C Encrypted Media Extensions (EME) recommendations.³⁶ The notion of a competitive standards development process taking place within a nonpartisan process is also belied by the hyper-partisan nature of some SDO governance discussions, as illustrated by the latest update of IEEE’s patent policy and the still ongoing controversy that it has generated.³⁷

While appealing, the optimistic representation of the standards development process as a highly competitive process within a neutral institutional framework is thus overly simplistic. For a more thorough assessment of SDOs’ resilience to the present “moment of stress,” it is important to have a closer empirical look at SDOs’ institutional architecture and the drivers of their decision-making.

14.3 SDO Governance Processes

Next to a set of formal rules that define SDOs’ membership, voting rights, and obligations of SDO participants, the conduct of business within SDO committees hinges upon informal practices and expectations rooted in cultural historical traditions, which determine the hierarchy of operational rules and their interpretation. Furthermore, SDOs usually comprise many committees, which in turn are made up of specialized groups, each of these subcommittees having their own internal ways of working. In this regard, while there are different ways in which SDOs and their standards can be legitimized as instances of private rule-making,³⁸ it can also be argued that different SDO models present different legitimization techniques.

14.3.1 Models of SDO governance

SDO governance is heterogenous.³⁹ While SDOs appear to share some fundamental governance features, those are further concretized in their operational frameworks in a way that serves their membership and is entrenched in their cultural traditions. Generally, a distinction can be made between four models of SDO governance, often combined in reality.

In the first model, SDOs comprise national committees established at the country level and according to the national rules (“national representation”). This modus operandi is exemplified by the three international SDOs, namely the ISO, IEC, and ITU. National committees participating in these SDOs represent national consensus, as opposed to the interest of a particular stakeholder group. However, SDOs may have different understandings of what the “national consensus” entails: in ITU, for instance, it refers to the interests of States, whereas ISO and IEC are preliminary concerned with consensus among domestic industry actors.⁴⁰ SDOs that are based on national representation derive their legitimacy from recognition by governmental authorities, either explicit or by the indirect means of co-regulation⁴¹ or, as it is the case with ITU, from participation of the public sector, that is, ministries and governmental agencies, in their standardization processes.⁴² Furthermore, since the national committees are treated equally in terms of membership rights and obligations, such as voting for standards’ approval, this type of SDO also enjoys legitimacy from the perspective of the international standardization system.

The second governance model represents a global partnership of regional SDOs, such as the 3GPP and OneM2M. The rules and processes of these SDOs strive to strike a balance between the interests of private actors (“balance of commercial stakeholders”). Stakeholders participate in these partnerships by virtue of their organizational membership in regional SDOs. Adherence to the requirements of commercial and regional balance is the legitimizing force behind their standards, immunizing them, at least in theory, from undue commercial influence. This type of SDO furthermore enjoys increased legitimacy from the perspective of commercial stakeholders, since the voting rights are typically allocated according to stakeholders’ size and financial contribution to the SDO.⁴³

In contrast to the two entity-based governance models, SDOs designed according to the third governance model represent associations of professionals rooted in the traditions of democracy (“democracy of experts”). Individuals participating in these SDOs typically follow the norms of conduct of their profession but may also participate through their affiliation and represent the interests of their employer. An example of such an SDO is the Standards Association of the Institute of the Electrical and Electronics Engineers (IEEE-SA). Standards developed in these SDOs are largely legitimized by their inclusive processes, which seek to provide equal opportunities for all members to voice their opinion, for instance, through the democratic election of SDO leadership. To enhance their legitimacy, such SDOs may also seek formal accreditation of their processes or standards by an organization in the highest hierarchical position, such as the American National Standards Institute (ANSI) or JTC1, which transposes public law requirements imposed on these national and global standards bodies to these private-sector associations.

The fourth and last model is even more centered on individuals and represents “informal groups of likeminded experts”: IETF, which started as a loosely organized group of internet researchers and to this day operates without formal membership requirements, is a vivid example of this governance model. Although some of these consortia have pledged the alignment of their processes with public law principles for standardization governance,⁴⁴ they usually do not seek formal recognition or accreditation at the higher hierarchical level.⁴⁵ Their legitimacy is exclusively derived from meritocracy and free participation of all interested individuals, regardless of their affiliation: more often than not, such SDOs would require individuals to refrain from representing the position of their employer as a vital requirement to the independence of the SDO.

14.3.2 Integrity of SDO Processes of Different Governance Models

The governance models discussed above generally demonstrate two different approaches to ICT standardization. Under the first approach, standardization decisions should reflect a consensus of those affected by the standard; standardization processes should therefore be open to the relevant stakeholders and seek a balance of the different stakeholder groups and assure sufficient representation of different types of interests. SDOs adhering to these principles may give greater weight to stakeholders with a larger stake in the standard, assess consensus within different categories of interests, and/or encourage participation of representatives of specific underrepresented interest categories. Under the second approach, standardization decisions should reflect a technical consensus among subject matter experts. SDOs operating following this approach seek to be open to any interested individual expert, expect their participants to take technical decisions on merit, and often discourage individuals to represent the interests of a particular stakeholder. Such approach is traditionally maintained in internet governance,⁴⁶ which is also illustrated by the IETF’s requirement for experts to participate in the individual capacity rather than represent their employer.

While impartiality and independence of SDOs has gained attention in the recent scholarly and political discussions,⁴⁷ an element that has been neglected in these debates is the interplay of different motives and incentives shaping individuals’ conduct in SDO committees. Irrespective of governance models, stakeholders participate in SDO processes by sending individual employees to attend their meetings. Furthermore, since SDOs have limited staff, their administrative and management functions – including editors and working group chairs, as well as the members of appeals boards, policy committees, and other governance bodies – are filled by volunteers who are often affiliated with private companies. Hence, the impartiality of the standardization process depends on the decisions of individuals employed by organizations with direct stakes in the SDOs’ decisions.

The individual dimension of SDO participation is quintessential, since it provides insights on decision-making within the standards body and its committees, revealing some fundamental accountability questions that are not always evident on the surface, including the following: who are the main decision-makers, how are they appointed, and what are their obligations towards the membership. The role of individuals is especially critical in a highly competitive environment, such as ICT standardization: experts sitting on the committees may wear different hats and have contradictory commitments to their employer, peers, or profession. Against this backdrop, understanding how individuals are selected to SDO leadership is an important facet through which the integrity and independence of different SDO governance models can be examined.

14.4 Formal Rules of SDO Leadership Selection

By far the most important and common leadership function in SDOs is the role of a working group chair. Individuals holding these positions have weighty responsibility but also considerable power: they coordinate the work of the respective working group, serve as the first stage of appeal or investigation processes into the breaches of SDOs’ procedural rules, and make pivotal decisions such as whether consensus has been achieved or the voting should be conducted. In some cases, chairs may delay or even stall their working groups’ discussion.⁴⁸ A position of a chair may thus be highly advantageous for companies actively participating in standards development and exert a significant influence on the outcome of standardization decisions; at the same time, since chairs serve as tie-breakers, they are critical to balancing the interests and ensuring impartiality of SDO processes.⁴⁹ Furthermore, pursuant to the established jurisprudence, decisions of chairs are attributable to an SDO and may thus entail legal responsibility for the organization,⁵⁰ which will also affect SDO membership.

Each SDO has its own rules for election or appointment of its leadership that are entrenched in historical traditions and have evolved due to the membership expansion and the emerging jurisprudence.⁵¹ This section reviews the rules of the four prominent ICT SDOs that apply to the conduct of working groups’ chairs, including their appointment, tenure, and resignation, in the light of the overall institutional rules and traditions of these organizations.

14.4.1 ITU

Formally, holding leadership positions in ITU Study Groups⁵² does not confer the individuals with any influence over standards development. This however contradicts the fact that chairs are tasked with maintaining the order in their committees, authorizing the voting as a “last resort” where consensus by the means of “sound out” cannot be achieved, ruling on motions, and suspending meetings.⁵³ While seeking the balance is not explicitly listed as a chair’s responsibility, they are required to protect the rights of each member’s representative.

Officials for ITU Study Groups, including chairs and vice-chairs, are appointed the Sector Assembly (e.g., the WTSA for the ITU Standardization Sector). Each member state’s and Sector member’s delegation nominates their candidate(s) for chairs and vice-chairs by consensus; the list of nominees, including their resumes and qualifications, is then circulated among the Sector membership and is made available on the ITU website.⁵⁴ When appointing the officials, the Sector Assembly should take into account individuals’ personal competences, equitable geographical distribution, and the need to promote more efficient participation by the developing countries;⁵⁵ the individuals’ professional knowledge and expertise, managerial skills, candidates’ and their administration’s commitment to fulfill the duties of the Study Group officials, as well as individual’s prior experiences as rapporteurs or editors and continuous participation in Study or Advisory groups, also counts.⁵⁶ Members are discouraged from nominating candidates who failed to participate in at least half of all meetings in the prior study period. In case the nominees’ qualifications are equal, preference is given to members with lowest number of chairs. Members cannot nominate candidates for chairs and vice-chairs for the same Study Group to safeguard geographical distribution; moreover, the appointment of vice-chairs is limited to three candidates from each region, but the ultimate number of vice-chairs appointed per Study Group depends on equitable distribution as well as the workload.

To allow introducing new ideas on a periodic basis and to provide opportunities to different States, Study Group chairs are appointed for a limited time and with a maximum tenure of two terms.⁵⁷ For the sake of continuity, this term does not count for another appointment, meaning that a Study Group’s chairman can be appointed as the group’s vice-chairman and vice-versa.⁵⁸ However, no individual can hold more than one vice chairmanship.

14.4.2 3GPP

Working Group chairs of 3GPP are responsible for the management of their committees, and their compliance with the prescribed processes, and are required to maintain impartiality and act in the interests of 3GPP when performing their leadership tasks.⁵⁹ Working Group officials are tasked with formulating the questions put forward for voting as well as with maintaining impartiality in the Working Group.⁶⁰ Furthermore, chairs determine when consensus is reached and may impose voting or temporary arrangements in case consensus is not achieved.⁶¹ At the beginning of each meeting, the chair is required to make a statement of antitrust compliance and call for IPRs;⁶² for a short period of time in 2019, the chair was also required to make a statement of compliance with the US EARs.⁶³

The Working Group officials are elected by the members of the respective Working Group every two years.⁶⁴ Candidates for (vice)-chairmanship should provide a letter of support from the 3GPP member, which should also assure the candidate’s compliance with antitrust rules if elected for the office.⁶⁵ In an endeavor to maintain balance, a Working Group’s chair and vice-chair, as well as their successive officials, cannot be from the same region, organizations, partner, or group of companies, unless no other individual is available to hold the office.⁶⁶ If more than one candidate is nominated for the chair position, the election of Working Groups’ officials occurs through secret balloting, with a threshold of 71 percent of Working Groups members voting and present; if the processes is unsuccessful, it is followed by a second ballot between the candidates obtaining the highest amount of votes.⁶⁷ Individuals can be reelected as Working Group chairs for the second term, and exceptionally, their tenure in the office can last even longer; there are no restrictions for the election of chairs whose tenure is due to expire as vice-chairs and vice-versa.⁶⁸

An incumbent chairman or vice-chairman who changes their affiliation, for instance, due to taking up new employment, is required to present a new letter of support from their new employer. If affiliation is changed due to the individual’s hiring by another company, and not their company’s merger or acquisition, the Working Group should also agree by consensus that the individual can remain in their role as a (vice-)chair.⁶⁹ When a chair is believed not to effectively perform their duties, their dismissal can be requested by 30 percent of a Working Group in a secret ballot, with 71 percent of votes considered as recommending the dismissal. Furthermore, if a Working Group member doubts the chair’s impartiality and believes the chair does not act in the interest of 3GPP, they should object to the chair’s decision and request that the objection is recorded, prior to taking the issue to the PCG.⁷⁰ (Vice-)chairs can be dismissed through a secret vote of the Working Groups when they fail to effectively perform their duties.⁷¹

14.4.3 IEEE-SA

IEEE-SA Working Group chairs provide leadership and guidance and serve as a contact point for questions or comments regarding standardization activity. Their main task is to move the Working Group forward while ensuring that every voice has been heard and that the rules and procedures of the working groups are respected.⁷² In carrying out their activities, chairs need to be objective, refrain from making motions and strive to balance the interests in their Working Group. The chair is also in power to determine the Working Group’s participants and is (almost) the only official who holds control over distributing the draft standard.⁷³

IEEE Study Groups officials, including chairs and mentors, are appointed by the Sponsor committee – a body that provides oversight for the working groups’ activities. Once assigned, the Study Group chair can further appoint the secretary who is charged with record keeping and contacting Study Group members; yet it remains the task of the chair to distribute the call for participation in a Study Group.⁷⁴ IEEE Working Groups chairs are either appointed by a standards committee or elected by the respective Working Group; in the latter case, the official should be confirmed by the sponsor.⁷⁵ Procedures for officials’ election, as well as the definition of what constitutes a consensus, are further specified in the Working Group’s charters; for instance, chairs of the IEEE-SA 802.11 Working Group, responsible for the development of WLAN specifications, including Wi-Fi, are elected biannually from the nominated individuals, following a debate in the biannual working group, upon receiving a simple majority of cast votes.⁷⁶

While there is no specification of the qualities and skills crucial for the chairs (presumably because those are left to Study and Working groups), it is required that the Working Groups’ chairs hold the membership of both IEEE and IEEE-SA, which implies that by the virtue of individual IEEE membership, they should be familiar to and with the SDO. There is no overarching requirement for a maximum term of office: chairs may either serve limited terms or undergo a regular vote confirmation.⁷⁷

14.4.4 IETF

IETF Working Group chairs are the formal contact point of their Working Group and IETF governance bodies and other SDOs. Chairs preside over the Working Group meetings, manage its activities and publications, accept or reject participants’ input, and decide whether a draft recommendation is to be published as an official Working Group draft;⁷⁸ they also moderate mailing lists, prepare face-to-face sessions, and serve as a first stage of conflict resolution. They have a wide discretion in administering Working Group activities and may also make decisions on behalf of their Working Group, where they may be assisted by the area directors – individuals in charge of a particular domain of IETF activities.⁷⁹ Chairs are also responsible for deciding when and whether consensus between the group members is reached,⁸⁰ which can be particularly challenging in the absence of formal voting and when most of the meetings occur through the mailing list. Crucially, chairs should balance “progress and fairness” and ensure that the Working Groups move forward while the process remains fair and open.⁸¹

IETF Working Group chairs are assigned by the area directors who in turn are selected by the nominating committee (NomCom), whose members are randomly selected from a pool of volunteers and approved by the Internet Architecture Board (IAB).⁸² While both technical and communication skills of a chair candidate matter, individuals who have been around in IETF for a long time and have been actively participating in its meetings are more likely to get appointed as chairs, especially if they gained “favorable prominence”⁸³ by having previously contributed to the documents or volunteered to review them.

IETF chairs’ neutrality and impartiality has been challenged on a number of occasions, including allegations of abuse of power and breaching fairness and neutrality of IETF processes by favoring solutions preferred by the chairs’ affiliation.⁸⁴ Interestingly, at least in these instances, the IETF appeal bodies did not find any evidence of conflict of interest stemming from the individuals’ affiliation,⁸⁵ illustrating two important elements of IETF leadership: first, the high level of trust in independent and unbiased judgment of chairs and, second, the chairs’ wide prerogative for moving forward the discussions in the working groups.

14.4.5 Takeaways from Analyzing the Rules for Leadership Appointment

Even though the four studied SDOs are rooted in different historical traditions, we can observe some similarities and differences in their rules for leadership appointment. The distinction between entity-based and individual-based governance models is particularly striking: as illustrated with the examples of ITU and 3GPP, entity-based SDOs devote particular attention to the balance in their leadership composition with such aspects as regional and commercial diversity and non-transferability of chairs’ positions.⁸⁶ Likewise, the employers’ formal and explicit support plays a significant role when selecting or appointing the chairs in these two organizations. Contrarily, the rules for leadership appointment in individual-based SDOs such as IEEE and IETF rely on the culture of meritocracy, rather than on balance of interests, and do not require any type of support from the officials’ employers or affiliations.

At the same time, surveying procedural rules demonstrates the importance of experience and expertise in all four SDOs. This is apparent from the conditions that candidate-chairs have to fulfill regarding, for example, meeting attendance, knowledge and experience in the organization, and compliance with SDOs’ antitrust policies. In both entity and individual-based organizations, chairs are always required to participate in an individual capacity and have a fiduciary duty to the SDO (although admittedly, whether or not the chairs indeed respect fiduciary duty is difficult to verify).

14.5 Legal and Institutional Dimensions of SDO Leadership

The institutional analysis suggests different approaches to legitimacy of SDO leadership, which correspond to the contrast between “commercial balance” and “meritocracy” of entity- and individual-based SDOs respectively. Yet, despite the identified procedural differences, including such nuances as opportunities for reelection and the duration of tenure, both types of SDOs approach leadership in a similar way in the sense that they have certain behavioral and reputational expectations for individuals holding leadership positions, requiring them to set their personal preferences, or employers’ agenda, aside in the interest of the SDO. These nuances undoubtedly contribute to the checks and balances that different SDO models have in place, depending on these SDOs’ governance structure, culture, and membership.

The fact that the requirements of expertise and experience appear to be the main determinants for leadership appointments, regardless the SDO’s institutional setup, demonstrates a strong culture of individual independence and meritocracy. The “community of professionals” mobilized through this culture functions outside the SDOs’ organizational hierarchy or State-driven processes, evidencing the phenomenon of “voluntary economic activism.”⁸⁷

While these observations do not allow us to conclude which SDO type is better equipped in dealing with the situation of distress, they help in reflecting on the SDOs adaptive capacities. They also indicate that despite the presence of checks and balances in their governance models, SDOs are not immune to crises caused by the capture of their processes. To strengthen SDO resilience, revisiting leadership rules in terms of neutrality and independence is in order.

Furthermore, and without any pretense of exhaustiveness, our descriptive analysis of SDO leadership rules, interpreted through the previous empirical studies on participation in SDOs suggesting the increase of participation of Chinese companies in ITU⁸⁸ and the unchallenged supremacy of Western companies in 3GPP, IEEE, and IETF,⁸⁹ allows us to make some observations regarding the integrity of different SDO governance models but also their relevance for global standardization activities. It is commonly assumed that standards developed through intergovernmental bodies, such as ITU, enjoy increased legitimacy, which also facilitates their global dissemination. However, the role of ITU appears to be limited for the industry, and Western countries where standardization traditions are entrenched in the private sector prefer to streamline their standardization efforts in the industry-led SDOs rather than intergovernmental ITU.⁹⁰ Conversely, ITU is a preferred standards development platform for standardization newcomers and, in particular, Chinese companies, which arguably use ITU processes as an opportunity to promote their technologies in non-Western countries: for instance, ITU standards are adopted as regulatory policy in Africa and Asia,⁹¹ while Huawei’s technologies are actively used in the development of smart cities on the African continent.⁹²

It is not entirely clear what served as a catalyst for this fragmentation. On the one hand, the global openness of ITU may have been the reason for Western States to resort to private organizations whose cultural traditions they are more comfortable with. On the other hand, the preference of Western industry for institutions with particular properties and their lack of interest in ITU may have created openings for emerging standardization stakeholders, which were quick to fill the vacant spots with their own standardization efforts. Most likely, these two phenomena are jointly determined. Regardless of their source, they indicate a serious lack of “openness” in terms of inclusiveness and geographical representativeness in SDO leadership.

Two perspectives emerge from this suggestion. The first one is the perspective of Western stakeholders, characterized by the growing distrust in ITU and concerns that its greater openness may allow for strategic national interests to prevail over commercial ones. These concerns go beyond ITU and are particularly relevant for the “national representation” governance model, since equal voting rights per national committee may not always correspond to the level of contribution to, or use of, their standards. Indeed, equal voting rights seem to facilitate achieving fairness and impartiality; in reality, however, precisely for this reason, this type of SDO is also extremely prone to lobbying and “packing the vote” strategies by the stronger stakeholders. Leadership of this type of SDO should be subjected to additional safeguards that ensure not only its diversity but also integrity and impartiality.

The second perspective is the one of non-Western stakeholders, and in particular Chinese actors whose participation in ICT standardization has surged only recently. From this potential viewpoint, industry-driven SDOs such as 3GPP, IEEE, and IETF exhibit bias toward Western stakeholders and a significant lack of diversity and global interest representation in their leadership. As this lack of diversity may render Western-driven SDOs increasingly less attractive for Asian stakeholders, these SDOs may also lose important technical contributions, which in turn may also affect standards implementation on the non-Western markets; the latter is especially worrisome given the current climate of techno-nationalism in countries such as China. In due course, this development may not only contribute to further fragmentation of ICT standards but also put into question the legitimacy of the global standardization ecosystem as well as these SDOs role as global standard-setters.

14.6 Conclusion

Huawei’s increasing influence in the global technological sector has generated various scholarly and policy discussions. With regard to standards development, the narrative shared by some Western policymakers and commercial actors is that through acquiring leadership positions in SDOs, Chinese stakeholders, particularly Huawei, may pave the way for SDO processes to become partisan towards China’s commercial and political strategic interests. However persistent, these concerns should be viewed in the light of the empirical evidence of Chinese and Huawei’s participation in SDOs and their representation in the critical positions in these institutions.

In this regard, the empirically observed pattern demonstrated that, currently, SDO leadership is still largely dominated by Western stakeholders. At the same time, the meeting attendance by individuals affiliated with Chinese stakeholders, and in particular Huawei, has been dramatically increasing. Hence, while concerns of Chinese stakeholders taking over SDO leadership are still premature, there is undisputable evidence of China’s and Huawei’s strategy to increase their presence in these SDOs. The question is then whether SDO processes can be trusted to address the arising concerns of a single group of stakeholders controlling their decision-making and whether SDO institutional framework will hold to the standards of neutrality and impartiality.

Our contribution addresses this question by discussing different SDO governance models, focusing in particular on the roles of individuals holding critical positions in four prominent SDOs. We demonstrate that, despite the strong institutional traditions of meritocracy and neutrality and the existent checks and balances of the different institutional frameworks, SDO leadership relies on the system where private interests are actively pursued through the incentives of individuals holding critical positions and is thus inherently fragile. To trust this institutional setup, we need to carefully consider how individuals that represent these institutions are selected and which institutional mechanisms are available to constrain their power over SDO decision-making. Despite the common, and rather optimistic belief, neutrality in standardization processes should not be taken for granted: further institutional and empirical analyses are at order to assess the resilience of SDOs to different types of crises.

15 The International Electrotechnical Commission A 115-Year Journey of Challenges, Change, and Resilience

Tim Büthe and Abdel fattah Alshadafan ^*

15.1 Introduction

Within a few years after it was established in 1906, the International Electrotechnical Commission (IEC) became the institutional focal point for the governance of electro-technologies and has for 115 years retained this preeminence – exhibiting striking resilience. As of the end of 2021, the IEC had developed 11,200 international technical standards and standard-like documents,¹ specifying design, performance, labeling, and other aspects of millions of electrical and electronic components and products. These standards are widely used across the globe for consumer products (with implications for consumer safety, consumer choice, and market share)² and – even more so – in business-to-business transactions.³ In a wide range of industries, they affect the functioning of markets, including market access and the distribution of costs and benefits, through interoperability, substitutability, etc. IEC standards thus ultimately govern technologies ranging from magnetics; electro-acoustics; batteries, and energy production, storage, and distribution; to information and communication technologies and various aspects of the digital economy, including artificial intelligence–supported applications and virtual/extended reality.

IEC technology governance thus is an example of private authority. The IEC exercises this authority as a nongovernmental transnational organization, along with its national member bodies (of which the most prominent ones are also mostly nongovernmental) and the overwhelmingly private-sector experts who populate its technical committees and carry out most of the technology governance functions in practice. This chapter examines the resilience of IEC private ordering.⁴

Notwithstanding the often high commercial stakes and the substantive societal importance of its standards, the IEC has attracted much less attention than its companion international standard-setting body, the International Organization for Standardization (ISO), examined in this volume in the chapter by Stephanie Biljmakers.⁵ One reason why the IEC has received less public and scholarly attention is that it has deliberately steered clear of getting involved in efforts to govern broad issues such as general quality management, environmental impact assessment and management, and corporate social responsibility, which the ISO addresses through its 9000-, 14000- and 26000-series of standards, respectively. These issues are of great economic and societal importance and have created much, sometimes controversial, visibility for the ISO. The public interest in these issues has prompted ISO to set up multi-stakeholder processes that have been extensively scrutinized by scholars and practitioners alike⁶ but remain atypical of the technical standard-setting processes in ISO and IEC (as well as the many organizations that mimic the ISO-IEC blueprint).⁷

IEC standards tend to be more strictly technical and relatively narrowly focused on issues specific to electro-technologies. Most scholarship about the IEC has accordingly been standard-specific.⁸ And with very few exceptions,⁹ previous work has paid little attention to the IEC’s institutional resilience.

This dearth of analytical attention is unfortunate since the IEC has, over the course of its 115-year history, experienced a series of challenges to its centrality as the preeminent international body for the governance of electro-technology and a key node in the increasingly global network of electrical and electronics engineering, which make studying the IEC insightful for understanding institutional resilience. The IEC has adapted to technological changes, the rise of the consumer movement, power shifts in the world economy, and other challenges with remarkable agility, building and exhibiting resilience, often by heading off challenges before they became existential crises. Examining the pursuit of resilience in the specific case of the IEC is valuable not just because it is even more purely representative of institutionalized technical standard-setting than the ISO, but also because it offers some distinctive insights, in part due to its longer history. We therefore provide this analysis of IEC resilience as a complement to the analysis of ISO resilience by Stephanie Bijlmakers.¹⁰

Our analysis of IEC resilience builds on Panagiotis Delimatsis’ notion of resilience as the ability to “absorb stress and reorganize after the occurrence of a disturbance that upsets” the status quo equilibrium.¹¹ A private regulatory body – or more generally an inter- or transnational organization – is resilient to the extent that it does not just nominally survive an exogenous (or possibly endogenous) sudden shock or gradual yet serious challenging internal or environmental changes but “absorb[s] stress,” adapts, reorganizes, or in other ways responds to the “stress” on the system so as to “emerge” from the episode “resembling its former state and functionality.”¹²

A conceptualization of resilience as persistence through adaptability, however, raises the – theoretically and empirically challenging – question of at what point adaptability entails so much change that it is no longer a means of resilience but rather an indication of the lack thereof, as illustrated by the long-standing conceptual and empirical debate over escape clauses in trade agreements.¹³ Similarly, when EU political leaders temporarily set aside state aid rules to allow member states to subsidize their domestic firms to help businesses stay afloat and prevent mass unemployment in light of, first, the COVID-19 pandemic and subsequently the Russian invasion of Ukraine, is this indicative of the resilience of the state aid rules or indicative of how brittle European political leaders’ commitment to the ordo-liberal regime of controlling economic nationalist subsidies really is?¹⁴ In Section 15.2, we therefore briefly introduce the IEC as a private regulatory body, focusing on four fundamental, defining characteristics or “attributes” of IEC-based technology governance, which would have to remain largely intact for any adaptation of this private regulatory body under changing circumstances to be considered indicative of resilience.

In Section 15.3, we then sketch the theoretical framework guiding our empirical analyses, before we identify and discuss four key challenges to the IEC’s preeminence and legitimacy over the course of its 115-year history in Sections 15.4–15.7, where we examine how the IEC has responded to those challenges. In Section 15.8, we discuss whether the experience of previous challenges has increased the private rule-making body’s resilience over time.

15.2 The International Electrotechnical Commission: Essential Attributes

Advances in electrical engineering in the late nineteenth century motivated prominent electrical engineers from across the then-developed world to seek common terms and measurements. In creating common metrics and nomenclatures, they sought to facilitate scientific and commercial exchange, reduce safety risks in the development and operation of electrical machinery, and foster the development of electrical engineering as a new field of science and engineering without borders. The developments in electro-technology and other considerations, which prompted them to institutionalize their information exchange and standardization efforts by founding the IEC in 1906, have been examined in some detail elsewhere.¹⁵ Rather than recap the early history of the IEC, we highlight here four essential or “fundamental attributes”¹⁶ of the IEC. These fundamental attributes would need to remain intact in the face of stress-induced adaptation for persistence to constitute “resilience” as defined above.

The first essential attribute of the IEC is being the institutional focal point for inter- or transnational electro-technology governance – or at least being able to make a defensible claim to being such a focal point and have that claim be widely believed. Being such a focal point implies, above all, providing the institutional structure and having the technical and administrative ability for developing high-quality technical standards in its area of expertise. It also implies that those standards, once they have been developed, will be widely used across the globe, not just where their implementation might be required by public laws and government regulations but also voluntarily because they are considered useful by producers and users of the products and services governed by those standards.¹⁷ If a standards-developing organization (SDO) is widely believed to have these qualities, it will lead to a widespread expectation that this SDO will (maybe even should) be the place where stakeholders will address further standard-setting needs related to the organization’s area of expertise.

As highlighted by Büthe and Mattli’s typology of global regulation,¹⁸ having such a single focal institution for technical standard-setting in a given jurisdiction or market avoids the (often drawn-out and resource-intensive) process of multiple standards competing in “standards wars” for market share after two or more conflicting standards have been fully developed – though at the cost of shifting the underlying conflicts of interest to the standard-setting stage.¹⁹ It creates incentives to invest in institutionalized joint standards development before a particular technical solution gets finalized and adopted as an international standard – subject to the structure, rules, and procedures of the standards-developing organization.

A second essential attribute of the IEC is maintaining internationally broad-based input legitimacy for its role as a global governor through inclusiveness toward all legitimate stakeholders based on a structure of nominally equal national representation.²⁰ The creation of the International Electrotechnical Commission was preceded in the late nineteenth century by the establishment of domestic electro-technical “societies” – professional associations of physicists and early electrical engineers – within virtually all the “advanced,” industrializing countries at the time. The highly transnationally connected individuals who started the IEC were mostly the leading figures within those domestic bodies.²¹ And while they initially largely acted on their own (and often with a personal commercial stake in the matter as commercially successful scientist-entrepreneurs), they laid a claim to acting on behalf of those national bodies. The IEC then later asserted these bodies to be representatives of all legitimate stakeholders in those countries. The IEC’s structure reflects this historical legacy to this day, and it is central to its claim of legitimacy based on inclusiveness toward all legitimate stakeholders via internationally broad representation. This claim to internationally broad representation means concretely that participation in IEC governance is organized by country and requires each participating country to have a domestic Electrotechnical Committee, which, upon becoming the country’s IEC member body, is recognized as the country’s “National Committee” in the IEC.

A third essential attribute of the IEC is its status as a nongovernmental (and therefore transnational) organization. The electrotechnical societies that were the IEC’s founding member bodies were mostly nongovernmental bodies.²² Over time, many of them have been recognized by their respective governments as private bodies with a public purpose; quite a few are also partially government-funded and/or regulated by governments; and a number of the national committees, especially from the Global South, are even government entities. The IEC, however, considers itself a strictly nongovernmental body – a defining feature that was consciously and emphatically selected already in the very beginning²³ – and governments as such have no direct role in IEC governance.²⁴

The IEC’s nongovernmental status has numerous important consequences. Among them is that the IEC does not have guaranteed public financial support but instead depends for its financial viability on buy-in from its – mostly commercial – stakeholders. Those stakeholders provide the IEC with expertise through their participation in standard-setting as well as financial resources, directly, by literally buying the documents that contain the technical specifications of IEC standards, as well as indirectly, via the National Electrotechnical Committees that comprise the IEC and pay membership fees. At the same time, the IEC’s nongovernmental character constrains the usability of traditional power resources of states²⁵ but also means that the legitimacy of global technology governance may be much more easily challenged than the legitimacy of a traditional (inter-state) international organization.

The fourth “fundamental attribute” of IEC governance is maintaining a balance between decentralized, bottom-up agenda-setting and decision-making, on the one hand, and centralized coordination and oversight, on the other, to ensure coherence and consistency as well as maintain the IEC’s ability to act in pursuit of its organizational self-interest. As discussed below (Section 15.3.2), the pursuit of this balance has been a key driver of the IEC’s structure and procedures and an essential source of both its technical authority (enabling it to become the focal institution for international electrotechnical standard-setting) and its legitimacy.

15.3 Explaining Resilience

15.3.1 Theoretical Sketch

A fully developed theory of organizational resilience is beyond the scope of this chapter. Yet an explicit sketch of the theoretical ideas underpinning our empirical analysis is warranted before we turn to examining specific challenges faced by the IEC over the course of its 115-year history. Building on Büthe’s proto-theory of preeminence in global private governance,²⁶ we posit that, for a substantively important international organization or transnational governance body, resilience – in the sense of its ability to survive shocks and environmental changes, such that it still resembles its former state and functionality as defined by its essential attributes – requires such a body to have three characteristics:

1. (1) Capacity and capability for autonomous agency. To be resilient, a global governance body needs to be set up in such a way that it is able to pursue its organizational self-interest even in cases when the body’s interests are distinctive from the interests of the national-level or subnational units that comprise the inter- or transnational body. Such capacity for agency implies a structure where the leadership and staff support does not just rotate among these “members” but has some permanence and genuinely identifies with, or has allegiance toward, the global governance body. It also requires the leadership to be authorized and incentivized to speak and act on behalf of the organization with some degree of autonomy.

   Following Cafaggi and Pistor’s work on regulatory regimes, Lavenex, Serrano and Büthe have recently introduced into the analysis of global governance bodies Nussbaum and Sen’s distinction between capacity and capability. The latter is defined as “the ability to recognize and articulate” the organization’s self-interest, even when it is not just the lowest common denominator (or some other function) of the constitutive units’ self-interest but might even diverge from them. Capability thus also implies an ability to develop original, alternative proposals for how best to pursue the organization’s own interests.²⁷ Having capability implies that the transnational body must have some permanent staff with the requisite analytical skill set, as well as financial resources that are at least in part independent of its members.

2. (2) Embeddedness among stakeholders. There is no global governance in a Hobbesian state of nature. Governance authority at the inter- or transnational level must be built and actively maintained since such authority is usually and traditionally situated at the local or national level – or at most at the level of regional common markets.²⁸ To be resilient, retain authority, and remain a focal point for developing standards or to govern other aspects of technology in the face of challenges, a global governance body needs to be at least sufficiently embedded among its members (and possibly other stakeholders) to ensure the continued relevance of the organization’s work to those stakeholders. Particularly important in this respect is the ability to recognize and meet the needs of stakeholders who might be in a position to participate in, or even set up, alternative inter- or transnational governance arrangements – sufficiently so that it reduces the incentive of those stakeholders to explore alternatives. At the same time, meeting the particular needs of those stakeholders must not to so far that the global governance body loses the required autonomy or legitimacy in the eyes of the organization’s other stakeholders.²⁹

3. (3) Ambition. The combination of capacity and capability should in principle assure the active and strategic pursuit of the organization’s survival with its essential attributes intact – that is, its resilience – because the continued existence and substantive relevance can be assumed to be an essential first-order preference of any organization.³⁰ In practice, however, the actual active and strategic pursuit of the organization’s self-interest is also a function of the skill of the organization’s leadership and its ambition to ensure the organization’s continued existence and importance. Institutional factors, such as career incentives and rewards for senior leaders’ skillful pursuit of resilience, can increase the likelihood that the global body will exhibit such ambition and develop the skills to pursue resilience, but the idiosyncratic qualities of the individuals who fill those leaderships conditions also matter.³¹

15.3.2 Does the IEC Meet the Requirements for the Pursuit of Resilience? Applying the Analytical Framework to the Specific Case

Operationalizing the required characteristics for the specific case of the IEC suggests that the IEC meets (and for a long time has met) the criteria set up abstractly above, which should empower it to pursue resilience. We first discuss how the IEC assures embeddedness, which is critical to the IEC’s technical expertise and authority, as well as key to the commercial usefulness of its standards. Given that electro-technology has changed tremendously over the course of the IEC’s existence (and it continues to evolve over time), with innovations resulting in “new” areas of electro-technology not yet covered by the IEC’s structure, maintaining (the ambition for) such preeminence also implies the ability to pursue organizational interests actively and strategically. It also implies a responsiveness to – and maintaining a reasonable balance between – major stakeholders who might otherwise have the credible option to try to “go it alone”³² by developing competing standards outside of the IEC.³³ So does the IEC exhibit capacity and capability, as well as embeddedness?³⁴

The IEC’s structure and procedures ensure its embeddedness. As of the end of 2021, the IEC has 110 Technical Committees (TCs); some of them also have numerous subcommittees (SCs), for a total of 212 TCs and SCs.³⁵ Much of the technical work in those TCs and SCs is actually done in distinct working groups (of which there were 725), project teams (200), and maintenance teams (669 as of the end of 2021). This structure and the procedural norms and rules of the IEC allow for bottom-up agenda-setting, making it very easy for a small number of national member bodies to launch the development of a new standard for a product or electrotechnical phenomenon.³⁶ Consensus norms then give a right to be heard to all member bodies that have elected to be “participating members” (P-members) of the TC where a given standard is developed, reviewed, or revised. These norms – at least in theory – provide all stakeholders with opportunities to make alternative or compromise proposals for all aspects of the technical work. They are reinforced by procedural rules governing the IEC standards development process, which require large super-majorities in formal votes on the penultimate “Committee Draft for Voting” (CDV)³⁷ and for the adoption of the resulting “Final Draft” as an official IEC standard.

Balancing these decentralized elements of the IEC’s institutional structure, the IEC has for a long time reserved a crucial (if mostly light-touch) centralized role for the IEC leadership, especially its Standardization Management Board (SMB) and the IEC Central Secretariat. Jointly, they provide coordination and oversight to ensure coherence and consistency as well as maintain the IEC’s ability to act in pursuit of its organizational self-interest.

The IEC leadership consists of a president, three vice presidents (one each for standardization management, market strategy, and conformity assessment), a treasurer, and the IEC Secretary General.³⁸ Candidates for the part-time positions of president or vice president(s) tend to come from the private sector and customarily have previously held prominent leadership positions in one of the largest IEC’s national member bodies. They are elected for (once-renewable) three-year terms, and during this time, (vice)presidents are supposed to pursue the interest of the IEC, only, though they usually retain their private sector full-time (and income-providing) position.

Not as visible but at least as important for the IEC’s capability and its capacity for autonomous agency are the Secretary General and the senior staff of the central secretariat of the IEC. They are longer-term, full-time employees of the IEC, which gives them a strong incentive to think and act in the institutional self-interest of the organization. The staff, which supports the work of the IEC leadership and administratively and technically handles most of the coordination between the IEC’s many committees, is lean (much smaller than the ISO’s) but readily provides the support to enable capacity and capability.

The SMB is critical to the IEC’s agency, as it coordinates and oversees the work of the many technical committees, subcommittees, and working groups of the IEC. It ensures that these various groups do not work at cross-purposes, for example, by developing competing IEC standards for the same purpose where the purview of two or more committees might overlap. The SMB (similar to the other boards) comprises “automatically appointed members” (representatives of the largest member bodies in terms of their contributions to the IEC annual budget and staff support for technical committees), elected representatives of the remaining member bodies, and IEC senior staff ex officio. The elected members of the SMB are elected for three-year terms, renewable once, by the IEC General Assembly, usually in the annual meeting of the member body presidents and senior officers.

SMB oversight is supposed to ensure timeliness and high quality of the technical output – and that all IEC work follows the procedural rules and norms for IEC standard-setting and no one company or country might highjack any TC or larger parts of the organization. The SMB also may reorganize the technical work by merging TCs; it appoints TC secretariats and chairmanships; it adjudicates jurisdictional conflicts between the TCs; and it is responsible for relations with other organizations.³⁹ In doing so, the SMB ensures the ability of the IEC to act in the self-interest of the organization while keeping the IEC leadership grounded in the organization’s member bodies – which we would expect to play an important role in the IEC’s ability to exhibit organizational resilience.

15.4 IEC Resilience in the Face of Technological Change

One of the remarkable features of the early history of the IEC is how few committed individuals it took to launch a transnational private body that has – for 115 years and counting – played a major, increasingly global role in the development and governance of an enormous range of electro-technologies. The entrepreneurial approach and skill of key figures – above all Charles Le Maistre, the IEC’s first and long-term secretary general – surely was important for bringing the IEC into existence as an organization with its consensus-oriented structure and procedures for developing “voluntary” technical standards.⁴⁰ The relative ease of its creation may also have been a function of fortuitous temporal sequence: the IEC was the first body of its kind, set up to address functional needs and serve the (largely common) interests of key political-economic stakeholders in the early years of a new field (electro-technology).⁴¹ Rapid technological development in this field meant that standardization tended to open up a wealth of new, profitable opportunities while foreclosing few. Standardization at that time thus resembled a coordination game with large gains from coordination and relatively small distributional effects, making distributional conflicts a second-order concern.⁴²

Yet, the conditions that facilitated the establishment of the IEC in 1906 also applied to a greater or lesser extent in later cases of “new” technologies. Indeed, over the decades, the development of new areas of electro-technology – such as batteries for mobile electrical devices, digital audio and video formats, electronics, and more recently artificial intelligence – have time and again created challenges to IEC preeminence. The IEC has proven remarkably resilient in the face of these technological changes.

The IEC was initially set up to agree upon a common set of terms and measurements that would be foundational for the development of electro-technologies and electrical products – anything from light bulbs to electricity-powered heavy machinery.⁴³ Its agenda soon broadened to include the development of standards for the design and performance of actual electrical devices. Initially, the focus was on power-generating equipment, industrial machinery, and standards for use (in scientific research and) within and between private enterprises.⁴⁴ Already by 1911, the agenda had become so broad that discussing all current projects in a single (multiday) plenary meeting was deemed impractical, prompting the IEC to delegate the technical work to more specialized committees, known today as the IEC Technical Committees.⁴⁵ Setting standards for consumer goods was added to the IEC agenda starting in the 1920s and became an important focus of multiple TCs after World War II thanks to the widespread electrification of households throughout advanced industrialized countries and the mass-market production of electrical devices for household use.⁴⁶ And as new electro-technologies were developed, the scope of IEC rule-making broadened further.

IEC standards have remained essential to the development of a wide range of electrical (and in more recent decades electronic) technologies in part because IEC standards define elements and components used as the foundation or building blocks for innovations and technological change. The units and methods for the measurement of voltage and frequency of electrical currents, established by the IEC early on, remain a good example: using other units or methods has become literally unthinkable. Another, more recent example are sensors, which have long had various industrial and household uses, and continue to become ever more important as key parts of complex smart manufacturing and a wide variety of artificial intelligence–driven or –supported systems.⁴⁷ A variety of sensors have, for instance, been integrated into smart “wearable technologies”⁴⁸ used, inter alia, in the healthcare sector. Such devices promise great improvement in patient care by tracking, recording, and (remotely) monitoring physiological processes and biomedical signals.⁴⁹ The COVID-19 pandemic brought this into focus: sensors installed in a wearable device can alert the user when changes in their metrics match those associated with COVID-19 or even track the stability and recovery of those infected.⁵⁰ The IEC plays a role in the development of all these new technologies because the sensors used are designed and manufactured according to the IEC 60747-14 “family” of standards, developed by IEC Technical Committee 47, such as the IEC 60747-14-10 for glucose sensors.⁵¹

Even more important is that the IEC has proven adept at adding new issues to its agenda to keep abreast of technological changes. This is partly a function of the relative ease with which a “new work item” can be added to any Technical Committee’s standards development agenda. Such a proposal to develop a new standard can be put forward by any National Committee, any Technical Committee (for topics fitting its expertise), the secretary of that TC, the SMB, or the IEC leadership. The proposal is then put to a vote only among the P-members of the TC or SC specified in the proposal as the one to develop the standard. Among them, a simple majority and a commitment of at least four of them (five for larger committees) is all that is required to launch the new standards project. These procedural rules make it very easy to extend the scope of the IEC’s technical authority while making it very difficult for those who do not want to see an IEC standard developed to prevent the launch of such an effort, as long as at least a small number of members share the desire to develop it.⁵²

There are limits, however, to such incremental additions to existing technical committees’ agenda as a response to the need for standards development, especially if this work requires distinctive expertise or involves a distinct set of stakeholders. Accordingly, the SMB added entirely new TCs to the IEC portfolio (and occasionally restructured existing TCs), including for computing and information-processing standards in the 1960s; for laser equipment in 1970s; for fiber optics (TC86), superconductivity (TC90), and wind turbines (now “wind energy generation systems”, TC88) in the 1980s; for fuel cells (TC105) in the 1990; and for flat-screen panels (TC110), for nanotechnology in electrical and electronic products (TC113), and for marine energy (i.e., the conversion of tidal and other water currents into electric energy, TC114) in the 2000s. Recently established TCs include committees focused on smart grid user interfaces (TC118), wearable electronic devices and technologies (TC124), and “robotics for electricity generation, transmission and distribution systems” (TC129). Even the development of futuristic-sounding flying cars will involve IEC standardization: such urban air mobility devices will likely rely upon existing standards and standards newly developed by IEC TC100 for surround-view monitoring of the car, by ISO/IEC JTC1 for biometric interchange formats, and IEC 62668 to ensure that the electronic parts safely work together.⁵³

In sum, the IEC has, time and again, responded to technological change directly by extending the range of electro-technologies (by now long including in principle all kind of electronics, too) for which it claims standard-setting expertise and authority. While this has not completely prevented the creation of new, more specialized bodies for developing technical standards (see below), it has allowed the IEC to remain the preeminent forum for such activities, especially where cooperation, coordination, and interoperability with related technologies is important, as the standards for them are often already being developed or maintained at the IEC. Importantly, IEC resilience in the face of technological change was by no means coincidental but part of a conscious strategy, as occasionally documented, such as when TC111 was set up in 2004 and assigned the task to “monitor closely the corresponding regional standardization activities worldwide to become a focal point for discussions concerning standardization.”⁵⁴

15.5 IEC Resilience vis-à-vis Possible Competitor SDOs

Having been the first transnational body for setting electro-technology standards gave the IEC something of an incumbency advantage, making it the default focal point for subsequent initiatives to achieve coordination or even harmonization of technical standards related to any area of electro-technology.⁵⁵ From early on, however, other standards-developing organizations arose at various times, and it appears that IEC leaders quite consciously sought to head off possible challenges from potential competitor organizations by establishing more or less formal relationships with them, turning them into collaborators instead. The International Conference on Large Electric Systems and the World Power Conference, for instance, were initially set up as fora for electrotechnical standard-setting in 1921 and 1926, respectively, thus effectively threatening the IEC’s preeminence for commercially very important segments of electro-technology.⁵⁶ Over time, however, their standards-developing activities were either absorbed by the IEC, or they yielded them to the IEC. Other potential competitors established a symbiotic, complementary relationship vis-à-vis the IEC, as in the case of the International Federation of National Standardizing Associations (ISA), founded in 1926 and also headed by Le Maistre, who ensured that its portfolio was defined as standardization outside of the field of electro-technology.

IEC resilience was also helped by fortuitous elements of its institutional design, which allowed it to survive the hiatus of World War II largely unscathed – in contrast to many other inter- and transnational organizations. The statutes of the ISA, for instance, required the organization to hold a general meeting at the latest every three years and tied the terms of office of anyone who could claim to act on behalf of the organization to that meeting schedule. Having held a meeting in 1939 just prior to the beginning of the war, the ISA could go until 1942, but then the ISA arguably ceased to exist; it thus became a collateral organizational casualty of the war. The IEC’s more minimalist rules, by contrast, allowed its secretary general to continue to serve in that role until the next meeting after the war (at which Le Maistre was confirmed once more).⁵⁷

After World War II, the establishment of the ISO as a standards-developing organization for all industries put the IEC’s preeminence or independence at risk. Yet, here again the IEC, led by Le Maistre (who continued as IEC secretary general until 1952), intervened to make certain that the ISO agenda would not clash with the IEC’s. The IEC then proceeded to establish quite quickly institutional mechanisms for a division of labor between IEC and its “sister organization” and to ensure that, for any issue at the intersection of the IEC’s and ISO’s respective areas of specialization, they would not develop competing standards but coordinate. This cooperation has been maintained for more than seven decades – albeit with a growing set of work items assigned to various subcommittees of the rather unwieldy “Joint Technical Committee 1,” which the two standards bodies manage and staff jointly.

The most serious challenge to the IEC’s institutional preeminence in recent decades arose from a group of IEC “insiders” in the process of the EU Common Market initiative in the 1980s. After the failure of its attempts to achieve regulatory harmonization through inter- or transgovernmental negotiations,⁵⁸ the EU sought to overcome divergent, markets-fragmenting regulatory requirements, standards, and norms by delegating the development of technical standards to transnational, nongovernmental standard-setting bodies.⁵⁹ Seeking to balance the attainment of common technical standards with the achievement of legitimate public policy objectives as defined by Europe’s political (governmental) authorities through democratic processes, they set up a system where European policymakers specify the overarching objectives through legislative processes, then delegate finding a “consensus” technical solution for achieving those objectives (subject to international trade law and EU stipulations against discrimination, anti-competitive conduct, etc.) to the then-nascent European-level standard-setting bodies, CEN and CENELEC (corresponding to ISO and IEC, respectively). This arrangement constituted a dangerous challenge to the IEC’s preeminence, given the prominent role of numerous EU countries’ IEC member bodies in IEC-based electro-technology governance.

The IEC responded to this challenge (heading it off for the most part, though not without compromising some of its autonomy) by striking the 1991 Lugano Agreement and then the 1996 Dresden Agreement with CENELEC, which sets out detailed procedures for cooperation between the two transnational SDOs.⁶⁰ For new standards, for instance, it specifies joint decisions by the pertinent TCs of both organization about whether IEC or CENELEC shall take the lead in developing the standard. If IEC takes the lead, it commits to writing a standard that allows for achieving the EU objectives, as well as completing the work on the time line necessary to meet the EU legislative mandate. If CENELEC takes the lead, it keeps the corresponding IEC committee informed, but the technical work then takes place in CENELEC, where non-European IEC member bodies do not have any automatic status. Either way, voting on the final draft standard takes place in parallel in both organizations. If adopted by both, then the often-European-made standard becomes an international standard without further technical discussion at the IEC.⁶¹

Notwithstanding the IEC’s propensity to swiftly pick up on (market demand for transnational private governance of) new technological developments, some firms have sidestepped the IEC to develop standards for new technologies in so-called standards consortia – ad hoc groups of firms set up (sometime formally as joint ventures) to develop a technical standard for a particular use and usually with exclusive intellectual property rights claims regarding the standard and the technical expertise contained therein.⁶² There are precedents for developing standards collaboratively in small, exclusive groups of firms,⁶³ but standards consortia became a distinct method of standard-setting only in the late 1980s and early 1990s, especially in the fast-changing information and telecommunications sector, where the long time required for IEC standards development (five to eight years in the 1980s) was considered particularly problematic.⁶⁴ The IEC responded to this challenge by taking various measures to accelerate the technical work in the TCs, SCs, and working groups, shortening the average time required, from the launch of a proposal for a new standard to the vote on the final draft, to less than three years by the early 2000s.

The IEC also has incorporated into its portfolio numerous standards initially developed by standards consortia (thus committing the holders of standards-essential patents to license those patents to any user on “fair, reasonable, and non-discriminatory” [FRAND] terms while usually also greatly enhancing the value of those patents). To give just two examples with particular importance to the entertainment industry: the audio CD standard, maintained since 1987 as IEC standard 60908, was originally developed by a Sony-Philips consortium in 1979/80.⁶⁵ And the Blu-ray optical disc standard, maintained since 2011 by ISO/IEC JTC1/SC23 as ISO/IEC 30193, was originally developed in 2000 by the Sony-Philips-Panasonic-led consortium in a fierce race with the Toshiba-led consortium, which had developed the competing High Definition DVD standard.⁶⁶ In all three cases (and many more like it), the IEC succeeded in gaining authority and in some sense restoring its preeminence, though at the cost of recognizing and arguably sanctifying standards developed without IEC input and without regard to the procedures and norms of IEC standardization.

Another challenge to the IEC’s authority arose from governments in the context of the multilateral international trade regime of GATT and WTO. In the 1960s and 1970s, cross-national differences in technical standards (as such or when subsequently used as a basis for government regulations) were increasingly recognized as important non-tariff barriers to trade.⁶⁷ By the 1990s, their trade-inhibiting effect for manufactured goods was estimated to far exceed the effect of the remaining tariffs for such goods between advanced industrialized countries, resulting in a strong push to incorporate the previously optional GATT Agreement on Technical Barriers to Trade into the WTO Treaty, of which it became an integral part, binding on all WTO member states. The resulting international trade law obligation to use “international standards” as the “technical basis” for regulatory measures (whenever international standards exist that can achieve the stated regulatory purposes, such as consumer health and safety) promised to be very profitable for competitive producers and to yield substantial macroeconomic gains.⁶⁸

For the IEC, the new prominence of international standards in international trade law created unprecedented visibility (beyond the niche world of standards experts), but it also created two risks: first, it created the risk that the IEC’s preeminence might be diluted through provisions in the intergovernmental agreement for the recognition of alternative transnational bodies for electrotechnical standard-setting. Second, it created the risk of overt politicization and government attempts to interfere in the work of the IEC. Working jointly with ISO, the IEC addressed these risks, first, by actively lobbying (successfully) for the incorporation of the ISO-IEC joint Code of Good Practices for the Preparation, Adoption and Application of Standards, which was written into the TBT-Agreement as Annex 3, which also gave ISO and IEC, via their joint “Information Center,” an official role in the implementation of the agreement. They also successfully lobbied against any mention of other “international standards” bodies (except for the more specialized, intergovernmental ITU) in the Agreement. The exclusive recognition of IEC, ISO, and ITU does not, strictly speaking, give these organization exclusive rights, but it raised their status and made it clear that they met the requirement for WTO recognition as an international standard-setter.⁶⁹ IEC responded to the second risk by being even more protective of its nongovernmental status. In the end, the entry into force of the WTO Treaty with its TBT provisions thus confirmed and may have even strengthened the resilient IEC and its preeminence.

The most recent risk to the IEC from an SDO competitor arises from China’s efforts to enhance its role in global technology governance, especially technical standardization through its Regional Comprehensive Economic Partnership and, more generally, through its Belt and Road Initiative (BRI). The BRI is an extremely broad – comprehensive, though not necessarily cohesively planned, and in parts still rather vague – initiative, sparked by Chinese President Xi Jinping in 2013, to connect China-centered continental East Asia more closely with East and South Asia, Oceania, Central Asia, Europe, the Middle East, and Africa via land and maritime networks.⁷⁰ These networks go by now far beyond the trade and transport networks of the Han Dynasty’s “silk road,” which is said to have inspired the BRI. It includes foreign direct investments, all kinds of development cooperation, and various forms of international, trans-governmental, and transnational exchanges (though the latter appear often high centrally directed from the Chinese side).

Most of the BRI is not about technical standards at all, but many observers have reported that China has been using BRI-created or -intensified interdependence as leverage to get other countries to accept Chinese national technical standards as de facto international standards – facilitated by the hub-and-spokes bilateral rather than multilateral structure of BRI governance, which guarantees China a dominant position vis-à-vis each of its BRI partners.⁷¹ A recent example has been the pandemic-induced demand for digital tools to fight COVID-19 to get BRI partners to adopt technologies based on Chinese standards that diverge from international ones.⁷² Chinese officials have attributed such efforts (as well as occasional talk of possibly setting up BRI-based institutions for international joint development of technical standards) to the inability of Chinese – or, generally, developing and transition economy countries’ – technical experts to get a fair hearing with the IEC. We therefore postpone discussion of this issue to Section 15.6.3.

15.6 IEC Resilience and the Global South: Economic Globalization, International Politics, and Transnational Private Regulation

15.6.1 A Growing Yet Still Marginal Role for Most Stakeholders from the Global South

From the beginning, participants in IEC standard-setting have paid their own way, which created a bias in favor of commercially successful stakeholders from rich countries. By the time World War I put the IEC on hold (eight years after it had been founded in 1906), the IEC had member bodies from only seventeen countries. Most of them were European: Austria, Belgium, Denmark, France, Germany, Italy, the Netherlands, Norway, Russia, Spain, Sweden, Switzerland, and the United Kingdom. Canada and United States also were among the founding members. Argentina (at the time one of the richest, most technologically advanced countries) and the quickly rising Japan were the only countries beyond the Northern transatlantic area to have national electrotechnical societies that joined the IEC before World War I.

In the beginning, this exclusionary focus was generally overtly considered desirable – as it was expected to facilitate agreement through similarities in engineering expertise, professional norms, and general needs and interests in international standards.⁷³ And the IEC became only marginally more diverse during the interwar years, adding mostly further European members and only five member bodies from countries beyond Europe: Australia (1927), India (1929), Egypt (1930), China (1936), and South Africa (1938). After the end of World War II, IEC membership continued to grow further but only at a very modest pace throughout the decades of the Cold War compared to other international and transnational organizations with a similarly universalist claim to global governance.⁷⁴ By the end of the Cold War in 1990, the IEC had grown to have member bodies from forty-four countries, including twenty non-OECD countries (eleven of them from the Global South).

The de facto role of stakeholders from non-OECD countries and especially the Global South in IEC-based global governance, however, remained more marginal as the membership roster might suggest: IEC National Committees from the non-OECD countries generally held participating membership in only a few IEC Technical Committees and Subcommittees; their actual participation in the process of developing new IEC standards was even rarer; and secretariats and chair positions were virtually all held by the technologically most advanced countries with the largest domestic markets (Sweden, Switzerland, and the Netherland were outliers as “small” countries regularly holding more than one of those positions).

The limited membership roster and the even more limited actual participation in standards development became a problem for the IEC in the post–Cold War period. It threatened the IEC’s persistence as the focal institution for the global governance of electro-technology in the post–Cold War years for four reasons. (1) Intensified economic globalization in the 1990s integrated ever more countries of the Global South into truly global markets and value chains, from which they often ended up excluded or unable to reap the full benefits without adopting international standards (including IEC standards) domestically.⁷⁵ The WTO-enhanced role of IEC standards in governing market access gave many countries quite suddenly a much greater stake in IEC standards, leading them (and some observers) to make their marginalization in IEC governance an issue. (2) The explosive growth in preferential trade agreements (PTAs) in the 1990s, covering a growing range of issues, including regulatory issues and technical non-tariff barriers to trade,⁷⁶ created a risk for the IEC that standards other than IEC standards might get written into PTAs as the technical basis for trade integration – especially in the growing number of South-South PTAs – unless at least one and ideally both countries had a stake in ensuring the continued centrality of IEC standards.⁷⁷ (3) The shift from the bipolar to a multipolar international system reduced the willingness of many countries, especially in the Global South, to be deferential to a small group of Northern countries on issues such as market governance, all the more so in light of simultaneous widespread demands for more democratic participation, both domestically within many countries and in global governance.⁷⁸ This resulted in rising expectations that global governance bodies provide at least for “voice opportunities” for the Global South and arguably also influence over outcomes.⁷⁹ Global governance institutions that failed to live up to these expectations were increasingly subjected to legitimacy challenges.⁸⁰ (4) The economic and political transition after the end of the Cold War resulted in several countries becoming new major powers, especially China, India, and Brazil. Until the 1980s and in some areas even the 1990s, they had been “rule-takers” in global economic affairs; but from the 1990s or 2000s onward, they have increasingly demanded greater voice and real influence in the governance of the world economy.⁸¹

The IEC responded to these challenges with several initiatives to grow and diversify its membership, as well as some efforts to increase opportunities for substantively meaningful participation by countries from the Global South. IEC leaders worked with several Global South countries’ electro-technical organizations to transform their informal relationships with the IEC into official associate (or even full) memberships. These efforts were complemented by the introduction of the Affiliate Country Program in 2001, through which developing countries can (to a limited but substantively meaningful extent) participate in IEC standard-setting without the financial burden of membership. In addition to gaining access to up to 200 standards documents free of charge (which they can then sell to interested users in their respective countries, providing them with resources they can use to strengthen domestic electro-technical standards bodies), the program gives participants access to IEC meetings and IEC trainings.

In some sense, these efforts have been tremendously successful. The IEC today has sixty-two full members plus twenty-six associate members (which pay lower fees in exchange for more limited participation rights) and eighty-six affiliate countries (which have certain voice opportunities but no voting rights).⁸² The IEC membership has thus become much more global and diverse, enhancing its input legitimacy, at least formally. P-membership in the IEC Technical Committees and Subcommittees, too, has increased for many non-OECD countries, including countries from the Global South (see Figure 15.1).

Figure 15.1. IEC P-Memberships 2021 vs. 2010.

Source: Authors’ original work based on publicly available data from the IEC website October 2010 and January 2022

As Figure 15.1 shows, however, for most developing countries, the increase is very small, and most of the long-dominant larger OECD countries have actually increased their P-memberships to the same extent or even to a proportionally larger extent. A similar pattern emerges with regard to committee chairs and secretariats, as depicted in Figure 15.2 for the (more powerful) committee secretariats: only four non-OECD countries hold any committee secretariats today. Russia, which used to hold one such secretariat in 2000, holds none anymore; the number of South Africa’s secretariats has shrunk from two to one; and EU members Croatia and Poland each hold one (unchanged even when considering the longer twenty-year time span for which this data is available). The striking exception to this overall pattern is China, which has significantly increased both its P-memberships and the number of secretariats held (from five to twelve).

Figure 15.2. IEC TC Secretariats 2021 vs. 2000.

Source: Authors’ original work based on publicly available data from the IEC for January 1, 2000 and January 1, 2022

Complementary qualitative evidence supports this interpretation of the quantitative evidence summarized in the figures: with the exception of Chinese participants, experts from the Global South report in interviews that they are still facing challenges in participating in IEC standard-setting. Participants from affiliate countries, in particular, report insufficient advance awareness of IEC work to be able to make substantive contributions to the development or revision of standards, and several of them indicated that much more training and advance preparation would be needed for them to be able to understand how the IEC works as an SDO (despite the IEC offering some training opportunities on just these issues already).⁸³ Our evidence aligns with a recent internal survey conducted by the IEC.⁸⁴ Additionally, our data show that, since the introduction of the affiliate program, only 59 comments on standards proposals have been submitted by more than one hundred affiliate-participants over the period 2004–2020, during which thousands of IEC standards were developed or revised.

15.6.2 The Rise of China as a Special Challenge for the IEC

Recent decades have not only seen a greater role of the Global South in the world economy. Distinctly – even when compared to the other “rising” BRICS powers – China has risen to the status of an economic superpower, demanding a greater voice and real influence in global economic governance, including in the governance of technology.

Communist/mainland China’s standardization regime emerged in the early 1950s. Under strong influence from the Soviet Union, it was characterized by top-down state control and widely considered ineffective in supporting Chinese industrial and technological development.⁸⁵ Beginning in the 1980s and accelerating in the 1990s, China introduced a series of reforms, which made technical standards, including international standard-setting, a central element of China’s national development policies, initially with the primary aim of reducing dependence on foreign technologies and the respective intellectual property rights.⁸⁶ These reforms included massive state funding to boost engineering education, structural changes in the Chinese domestic standards-developing institutions, specialized training courses for technical standards development, as well as numerous incentives to encourage Chinese stakeholders to increase their participation at the international level, resulting in increased Chinese presence across a broad range of inter- and transnational SDOs.⁸⁷

Having superseded the United States as the largest patent applicant in the world, China is now capable of developing domestically sophisticated alternative technical standards to many international ones. This can already be observed in its pursuit to establish, among other others, a homemade satellite navigation system (as an alternative to GPS) and a Cross-Border Interbank Payment System (as an alternative to SWIFT).⁸⁸ These developments have posed a major challenge to the IEC as the focal institution for electrotechnical standard-setting, for at least three reasons. First, China internationalizing its technical standards outside the IEC’s institutional framework directly undermines the IEC preeminence and status as the focal institution for electrotechnical standard-setting. Second, China has occasionally hinted at establishing competing international bodies to allow stakeholders that are traditionally marginalized at the IEC to have better representation. This might prompt such stakeholders to leave the IEC to join the China-led institutions. Finally, China-centered competing institutions threaten established powers’ ability to keep tabs on newly developed standards and technologies. This is important, not least because they are particularly skeptical of Chinese activity in the area of digitalization and data protection.⁸⁹

15.6.3 IEC Responses to the Rise of China

China has repeatedly emphasized that it has no desire to overthrow the current standardization regime and that it only seeks to ensure that its interests are taken into account similarly to those of the other major, technologically most advanced countries.⁹⁰ The IEC’s response has taken these Chinese assurances seriously and has attempted to accommodate China to a greater extent, so as to give it a greater stake in the continued functioning and preeminence of the IEC – in sense of what we have defined as resilience in the introduction.

Concretely, the IEC has facilitated China becoming one of the most active and prominent member countries. Since 2011, China has been recognized as one of the leading members, entitled to an automatically appointed seat on the SMB and the other IEC decision-making bodies. China also holds two IEC “ambassador” positions (responsible for representing the IEC interest in IoT and cyber security). And in 2019, the IEC elected Yinbiao Shu, chairman of one of China’s five largest state-owned electricity generation enterprises, as its next president; his three-year term started on January 1, 2020.

Already a P-Member of most TCs, China has increased its formal participation even further with P-memberships in now 90 percent of the IEC TCs. At least as importantly, the volume and quality of Chinese delegates’ contributions to the technical discussions at the committee and working group level has notably increased. China has also substantially increased the number of TC secretariats held by its delegates. Working with some of the traditionally leading member bodies (especially Germany’s DIN/DKE), IEC has also attempted to address what are widely seen as key reasons for Chinese experts’ arguably often limited success in IEC committees, including language skills and lack of understanding the norms and procedures of IEC committee work.⁹¹ Interviews with a former secretary general (CEO) of the IEC confirmed that these changes were a conscious response to the rise of China, seeking to elevate its status in the IEC in accordance with its increased status in the world economy.

15.7 Unresolved Challenges

15.7.1 Democratic versus Expertise-Based Legitimacy: The Rise and Resurgence of the Consumer Movement

The IEC has always maintained that it welcomes the input and seeks balanced participation from all who have a legitimate stake in the development of electro-technology.⁹² The IEC Code of Conduct for Technical Work also requires the national member bodies to represent all interests at the national levels. In practice, however, stakeholder representation has been (with rare exceptions) limited to technical experts whose participation is funded by private sector employers with an immediate commercial stake in the issue at hand.

This predominance of private sector experts is consistent with the IEC’s reliance, from the start, on the expertise-based authority of the IEC, its national member bodies, and the individual participants in its technical committees for the legitimacy of IEC governance.⁹³ The IEC’s expertise-based authority has in recent decades been supplemented by delegated authority, especially since WTO member states designated ISO and IEC standards (in the WTO’s TBT-Agreement) as a way to achieve legitimate public policy objectives without setting up unnecessary technical barriers to trade through divergent national standards.⁹⁴ The consumer movement, however, increasingly calls into question the IEC’s reliance on little more than expertise-based and delegated authority.

The IEC started to develop standards specifically for consumer products – and explicitly acknowledged consumer safety and welfare as objectives of IEC regulatory governance – starting with the lamp socket standards it developed in the 1920s.⁹⁵ But the question of whether consumers needed to be incorporated into the standard-setting process to safeguard the IEC’s centrality and legitimacy was only brought to the fore by the rise of the consumer movement in the late 1960s and the 1970s,⁹⁶ as well as the broader shift toward post-materialist values across most advanced capitalist democracies.⁹⁷ To be sure, consumer interests are far from assured voice or influence over policy – even in democratic political systems,⁹⁸ which might be due to organized opposition from producer interests⁹⁹ or difficulties in discerning consumer preferences.¹⁰⁰ Research on the political consequences of post-materialism also yields mixed findings regarding the relationship between post-materialism and political consumerism or, more generally, willingness and forms of political participation. Yet the dearth of consumer representation (and more generally the representation of noncommercial interests) in IEC technology governance¹⁰¹ has consequences for the contents of IEC standards and increasingly has come to be seen as a threat to the IEC’s legitimacy.¹⁰²

In response, IEC (and ISO) in 2019 created the ISO/IEC Guide 59, which mirrored the “Six Principles for the Development of International Standards, Guides and Recommendations,” articulated in 2000 by the WTO TBT Committee as part of its Code of Good Practice: transparency, openness, impartiality and consensus, relevance and effectiveness, coherence, and ensuring de facto opportunities for participation by stakeholders from developing countries.¹⁰³ ISO/IEC Guide 76:2020 also calls for taking consumers’ inputs in consideration in developing service standards.¹⁰⁴

To implement the Guides, the IEC sought to facilitate noncommercial stakeholders’ participation in standard-setting, for instance, by allowing “liaison organizations” participation (differentiating between three types with different participation rights).¹⁰⁵ Moreover, the IEC has increased its use of digital tools to boost participation. Beginning in 2001 already, it required all comments to be submitted online and started to introduce electronic voting on technical work. More recently, the IEC introduced to its website a tool to allow the public to submit comments online, and it has continued to increase opportunities for remote access to documents and standard-setting activities – including through the “online authoring tool,” introduced to enable participants to work on a given document simultaneously. All of these steps aim to lower the costs of participation (which had been frequently noted as an important impediment for noncommercial stakeholders).

Regrettably, however, the limited publicly available information – as well as interviews with IEC insiders with access to performance data for the IEC-internal systems – suggest that all of these efforts have yielded little actual participation by consumers so far. The public commenting tool, for instance, has registered a small number of records only.

15.7.2 Gender Equality in IEC Standard-Setting

The IEC has also been repeatedly criticized for the lack of women participants in its work.¹⁰⁶ Recently, the IEC admitted the existence of the problem, having examined it through an internal survey.¹⁰⁷

The IEC has, so far, responded to this, above all, by promising to take corrective action. It also joined the United Nations Economic Commission for Europe, supposedly to ensure representation of women in TCs. Additionally, the IEC has partnered with the ISO under the stewardship of the Joint Strategic Advisory Group to develop guidance to help TCs ensure they are developing gender-responsive standards. These efforts, however, have only recently begun, and it remains to be seen whether they are effective, given the continued strong gender imbalance in most engineering fields.

15.8 Conclusion: Learning Resilience?

Over the course of its 115-year history, the IEC has exhibited remarkable resilience in the face of numerous and diverse challenges to its preeminence – challenges that have arisen from technological change, the emergence of alternative institutions for developing electrical and electronics standards, and geopolitical upheavals and related power shifts in the world economy, including two world wars, decolonization, the end of the Cold War and the arrival of new, rising powers in the world economy. In this chapter, we have provided a sketch of this resilience and examined its drivers (as well as its limitations).

We started by identifying (in Section 15.2) four essential attributes of the IEC, which, we suggested, would have to remain intact in the face of otherwise extraordinary adaptability to head off challenges to its predominance and legitimacy, if we are to consider the IEC’s continued existence indicative of genuine resilience. We then sketched a theory of resilience, extending Büthe’s proto-theory of organizational preeminence in light of Delimatsis’ analytical framework for this book. The empirical account of IEC resilience in light of a variety of challenges that it has encountered over the course of more than a century show time and again the central importance of the IEC’s autonomous agency in pursuit of its organizational self-interest – while largely maintaining the inclusive, participatory governance structures and procedures on which its legitimacy is in large part based.

At the same time, the IEC cannot be said to have (yet) successfully addressed all challenges to its preeminence, raising questions about the extent to which resilience can be “learned.” To be sure, some changes made by the IEC in response to earlier challenges, such as its creation of the Standards Management Board (originally set up in the 1920s as the Committee on Action to coordinate the work of its then-fifteen Technical Committees), have lastingly enhanced its ability to combine autonomous agency with legitimacy-enhancing embeddedness of the IEC leadership in the community of member bodies. Yet the ultimate test of resilience arises from having to respond to shocks that are different from prior ones, necessarily limiting the extent to which past resilience might predict future resilience.

Epilogue An Evolutionary Theory of Transnational Private Regulation: Investigating Causes and Effects of Crises

Fabrizio Cafaggi

^*

The rich and stimulating contributions in this book focus on transnational private rule-making and investigate the resilience of private regulators in various sectors, primarily in the field of finance and technical standardization. Within this conceptual framework, special attention has been devoted to the impact of crises on transnational private regulation (TPR) and whether organizational resilience may provide a good conceptual tool to describe the modes of evolution of TPR: its birth, development, consolidation, dissolution.

My analysis first provides a short overview of TPR and then focuses on the impact of crises.

I.1 Who Are the Transnational Private Regulators?

TPR is a form of regulation that encompasses standard setting, monitoring compliance, and enforcement. Unlike conventional self-regulation, where regulation is produced by regulated entities, in TPR, regulators and regulated do not coincide. It differs from the more conventional forms of self-regulation since it includes in the regulatory process not only the regulators and the regulated but also the potential beneficiaries of and those harmed by the regulatory process.¹ Inclusion may take different forms from loyalty (membership) to voice (participatory rights to standard-setting processes for those who are not members of the organization). Increasingly, voice has been provided also to those potentially harmed by transnational regulatory regimes, deepening the differences between transnational self-regulation and private regulation.² However, the voice of the disregarded is still limited and the participatory instruments are not always effective.³

It is important to consider both the governance structure and the participants in the regulatory process.⁴ Often regimes arise out of confrontation between firms and NGOs with some degree of participation by public actors, including international organizations (IOs) and individual states. These features permit the internalization of regulatory externalities, usually left out in self-regulatory regimes. However, whereas the costs of regulatory regimes might be internalized, distributional issues between insiders and outsiders of the regulatory regime often remain unsettled. But even when, as it is the case in the financial sector, private regulation is primarily industry regulation, different forms of accountability have developed to move away from conventional self-regulatory regimes for more integrated standard-setting processes. Governance is relevant but the regulation of standard-setting processes may provide opportunities to increase legitimacy without modifying the single stakeholder governance structure of the private regulator.

TPR differs also from soft law.⁵ TPR is produced by private actors, at times in collaboration with public actors, with instruments typically private like codes, guidelines, principles, etc. These instruments only bind those who sign on. Soft law, instead, is produced by public bodies according to the procedures defined for rule-making but it does not have binding effects on the addressees⁶.

One common dimension to soft law and private regulation is the role of persuasion. Unlike hard law standards where coercion is the rule, soft law and private regulation are mainly based on persuasion. Steering instead of prohibiting is the main objective. In TPR, consent is at the core of legitimacy and accountability. Clearly the regulatory share of the private regulator affects the role of consent and may transform in practice persuasion into coercion. This is the case where the only available standard is produced by private actors as is often the case in the banking sector for payments or other instruments like the Society for Worldwide Interbank Financial Telecommunication (SWIFT).⁷ Hence, consent is relevant, but to understand its real function, it needs to be correlated to the distribution of regulatory power. The more dispersed the power the more relevant is consent for legitimacy and accountability of TPR.

Transnational private regulatory processes do not reflect a single governance framework concerning standard setting, monitoring, and enforcement. Two basic governance models are in place: one based on structural separation and the other on functional separation. In the former, each function is performed by an independent organization. In the latter, all functions are performed by the same organization, but internal functional separation is warranted by having both procedural and substantive safeguards that ensure independence of each division. There is a clear trade-off between independence and coordination. Separation among regulatory functions warrants higher independence but entails greater coordination costs. Organizational resilience may vary depending on which governance model is adopted.

In certain instances, standard setting is performed by one body whereas monitoring is performed by another body. This is the case when, for example, sustainability standards are defined by one organization (ISEAL) whereas their compliance is monitored by another organization (Transparency International). The alternative model is one that incorporates all the regulatory functions within a single body with functional rather than structural separations. Integrated models ensure stronger coordination but present higher conflicts of interest and lower degree of impartiality. Models characterized by functional separation, instead, bear higher coordination costs but warrant more protection to those potentially harmed by failure to apply the regulation or by its misapplication.

I.2 How Is the Transnational Regulatory Space Composed and Organized?

The transnational regulatory space is densely populated by multiple players who engage in different types of relationships.⁸ The concentration varies significantly. There are areas (like finance and banking) where power is highly concentrated and areas (like food safety and sustainability) where it is fragmented. The space of choice concerning standards by potentially regulated entities is correlated to consent and to the legitimacy and effectiveness of private standards. The wider the choice, determined by low concentration of power and regulatory pluralism, the higher the likelihood that the regulated and the beneficiaries participate in the regulatory process. The more limited the choice, when power concentration is high, the more likely is that participation is low and governance hierarchical.

The density of the regulatory space and the objectives of regulation affect the relationships among private regulators. TPR is ever more characterized by a combination of cooperative and competitive relationships among private regulators and between public and private regulators. There are different forms of cooperative relationships among private regulators ranging from informal collaboration to agreements or forms of organizational integration.⁹ These collaborative forms may have different weights, depending on whether they focus only on standard setting or encompass the entire regulatory process. The focus on compliance with transnational private standards has generated new and original forms of collaboration between private regulators given also the relatively minor role played by courts. One significant element that contributes to the differentiation of forms of regulatory collaboration is the use of hard or soft law on the public side.

Competitive relationships among private regulators give rise to regulatory competition. Unlike the public domain, where the public regulator is usually a monopolist, in TPR the coexistence of regulators is the rule; often this coexistence produces competition for regulated entities to increase their share in the regulatory market. The extraterritorial reach of TPR determines competition over global shares of regulated entities.

The evolution of private regulatory models depends on multiple factors and differs across sectors. Among the determinants of changes in TPR, the following stand out: (1) power shifts within the marketplace among regulated entities, (2) regulatory failures, (3) increase or decrease of regulatory competition within the sector, (4) rules imposed or recommended by international organizations. Changes require realignment between values, objectives, and regulatory instruments.

The evolution of TPR is responsive to the change of regulatory needs and to the distribution of power among the different constituencies participating in the organization. These changes may depend on the shifting balance of power among the regulated (market players) or between the regulated (firms, banks) and the beneficiaries (consumers, customers). The example of food safety provides a clear illustration of the evolution of forms and instruments of regulation and the rise of certification with the change of powers from producers to retailers that occurred at the end of the last century.¹⁰ The emergence of GFSI, a benchmarking institution for food certification, was the response to the change of market power along the supply chains and of excessive private regulatory competition concerning safety standards.

The creation of GFSI did not eliminate competition but provided a constructive framework for competition among certificate scheme owners. Nevertheless, what is even more relevant is that an organization born as a membership body of retailers in opposition to producers has later become a foundation composed by both and by service providers. This transformation of the governance is the result of a change in the regulatory space. It highlights the link between the organization of regulatory space and the transformation of relationships among private regulators.¹¹

I.3 What Is the Relationship between Transnational Private and Public Regulators?

TPR operates in a framework of institutional complementarity between private regulators, States, and international organizations.¹² Institutional complementarity encompasses both cooperative and competitive relationships between private and public actors that can evolve over time.¹³ Cooperative relationships may be compatible with common or separate standard setting where both concur to the definition of rules of conduct by the regulated. Transnational regulatory cooperation increases legitimacy and contributes to regulatory effectiveness.¹⁴ In the past twenty years, memoranda of understanding, consultation agreements, or mutual participation in the governance structures have developed to favor regulatory cooperation.¹⁵

It is important to underline that the relationships between transnational private regulators and public bodies might also be competitive, where public and private actors compete for regulatory shares. Competition occurs especially when public standards are not mandatory as is the case for soft law instruments. Competition in the short run often leads to collaboration in the longer run.

Food offers a good illustration. Not only have GFSI internal constituencies changed, moving toward a more collaborative structure, but it has also evolved over time developing collaboration with states and public entities.¹⁶ As a result, it has generated more products like the Global Food Security Index.

Historically, regulatory failures within the public domain have triggered important changes in the private domain. The well-known example of environmental protection and the birth of private actors in forestry after the crisis in 1994 is illustrative of one dynamic leading to the emergence of private organizations as a result of public failures.¹⁷ The opposite dynamics occurred in relation to the payment system with the failure of the self-regulatory regime in EU and the adoption of the first payments Directive.¹⁸ These are examples of how shortcomings in the public domain have sparked the birth of new private organizations or determined the decline of existing private organizations when political or regulatory failures have occurred.

Changes can also stem from excessive private regulatory competition and fragmentation. Excessive fragmentation and competition among private regulators have been a major driver of change of both the governance and the standard-setting activity. Food safety standards, as well as sustainability standards, provide examples of how regulatory competition may lead to a credibility and legitimacy gap and therefore instigate governance changes increasing procedural accountability and stakeholder participation.¹⁹ Competition has also brought about aggregation and cooperation among private regulators triggering forms of meta-regulation.²⁰ The creation of GFSI in the area of food and of ISEAL in the area of sustainability provide good illustrations of these changes. Their creation has deeply affected the organizations participating in the meta-organization but also of those that did not enter the regime either because they did not want to or because they were excluded. Regulatory competition has also influenced the content and the scope of standards. The turn to the consumer protection and to sustainability by ISO has also been driven by external competitive pressure.²¹

So far primarily endogenous changes have been described. But exogenous factors have also played a role in the transformation of TPR. Often changes of private regulators’ organizational models have been stimulated by rules recommended or imposed by IOs. This is part of the phenomenon that has successfully been labeled orchestration.²² Prominent in orchestration has been the role of WTO.²³ WTO standards and rules have affected both the process and the content of transnational private standards.²⁴ These are, instead, exogenous-driven changes that do not present the features of a crisis but may transform the identity and mission of the private regulator.

Changes have come not only from IOs but also from the interaction between transnational private regulators and States. A form of regulatory interaction is clearly identifiable between ISO and the individual States.²⁵ Similarly, a very illustrative example of reciprocal influence is the relationship between International Swap and Derivatives Association (ISDA) and States in relation to bankruptcy where reciprocal influence has occurred over time.²⁶ These are examples of a broader phenomenon of institutional complementarity between transnational private regulators and public organizations including both States and international organizations.²⁷ The dynamics of institutional complementarity have been investigated through the lenses of interactions leading to, among other things, enhanced regulatory capacity.²⁸

None of these changes, no matter how radical they might be, can be compared to those produced by systemic crises. Both the causes and the effects differ. But it is important to compare and to contrast dynamics of changes in ordinary times and dynamics of changes in times of crisis. Both dimensions of change and time of occurrence differ. During crises, changes are wider and sudden, often not always unanticipated. In ordinary times, changes are more incremental, to a greater extent foreseeable and they spread over time.

I.4 TPR and Crises Responses: From Organizational to Relational Resilience?

In Section 16.3, three dimensions were analyzed: (1) the structure of the regulatory process in transnational private regulation, (2) the organization of the regulatory space and the combination of competitive and cooperative relationships among regulators, and (3) the complementarity between public and private transnational regulation, its forms, and effects.How do crises impact on these three dimensions? How do changes and dynamics occurring in ordinary times differ from those originating from crises? Clearly the specific features of TPR call for a specific account of crises’ impact and resolutions.

The relationship between crises and regulatory changes is at the core of many chapters in the book. A rich set of questions emerge. What are the characterizing elements of crises? How does one distinguish between a crisis and other types of radical or incremental institutional changes in regulatory processes? Is the impact of the crisis on regulatory processes permanent or temporary? Are the institutional consequences of a crisis reversible or irreversible? What factors should be considered to assess the impact of a crisis and evaluate its intensity and reversibility on transnational private regulation? Does transnational private regulation feature specific aspects in relation to crisis responses compared to public regulation? How can the impact and the role of organizational resilience in determining the consequences over TPR be measured?

The book’s editors suggest that “rarity, irregularity and low likelihood are key traits of crisis events, calling for swift crisis management to allow for recovery. Crises constitute critical junctures which may result in distinct trajectories of change: chain reaction leading to collapse and extinction; transformation for the better; or recovery and rebirth under a renewed framework and context.²⁹ In that sense, crises are testbeds for effective crisis management and its potential for recovery and readjustment.”³⁰

The editors opt for a process rather than one-off-event definition of crisis. They suggest that both exogenous and endogenous factors determine both the characteristics and the responses to the crisis. A crisis is characterized by radical and unanticipated changes in the regulatory process. In the more radical scenario, it determines the dissolution of regimes and the emergence of new ones.

Crises should be distinguished from regulatory failures. Crises are characterized by sudden occurrence and unanticipated systemic effects. They involve a whole sector or even more than one sector. Once we distinguish between crises and regulatory failures and, within crises, we separate organizational from relational resilience, the next question is whether a unified theory of impact crisis can be proposed, or whether crises differ from one another and from sector to sector so that a single and unified impact theory cannot be plausibly offered.

Crises are characterized by unexpected and often sudden modifications of institutional conditions, determined by factors beyond the control of those institutions. The legal aspects of crises also differ depending on whether fundamental rights are at stake. This is one of the many differences between the financial crisis of 2008 and the sanitary crisis of 2020. Within crises, distinctions should be drawn depending on whether the driving factors of the crisis are endogenous or exogenous to the organization. The editors focus primarily on exogenous driven crises. A complementary inquiry into exogenous factors can help examine the impact of crises on TPR.

Clearly, it is the combination of the pre-existing institutional architecture and the specific factors determining the crisis, which influence the impact and the solution of the problems generated by the crisis, determining how private regulatory authority is redistributed among existing actors and, even more importantly, between existing and new players.

The broader question is “if” and “how” the crises impact on TPR and on the relationship between States, international organizations, and private regulators. More specifically, on which dimensions of TPR do crises have an impact? The recent COVID-19 crisis suggests that when fundamental rights are at stake changes have to be based on clear institutional architectures compliant with the rule of law. But a fully fledged theory of the relationship between crises and the rule of law has not yet been provided. The relevance of fundamental rights protection in crisis management will be shortly examined later.

To define the impact of crises on regulatory processes it is useful to distinguish between short- and long-terms effects. The short-term effects usually determine an increasing role of States and public actors. There is no evidence that during crises wider delegation of regulatory powers to private actors, including standard setting, takes place. On the contrary, emergencies often increase the power of public bodies to control regulatory processes, including those usually delegated to private regulators. This is particularly true when private regulation impinges on fundamental rights, as, for example, the area of data protection, information technologies, and freedom of expression. The COVID crisis however showed that the necessity to ensure compliance with sanitary obligations and the use of soft law has increased the role of private entities in monitoring compliance not only with soft but, at times, even with hard law.

Private standards are de jure voluntary, but the space of choice by regulated entities is determined by the concentration of regulatory power in the hands of regulators. The higher the concentration of regulatory power the more limited is the choice of regulated and the role of consent. Voluntary standards need time to be applied in order to persuade regulated entities to join in and comply. The conventional belief is that emergencies typical of crises can be incompatible with voluntary standards if persuasion rather than coercion is the basis for their adoption.

However, somewhat counterintuitively, the effectiveness of standard setting in times of emergency does not necessarily require hard public law. The COVID crisis has shown that nonbinding soft rules may be more effective than hard binding rules, especially when scientific uncertainty is pervasive and fundamental rights are at stake.³¹ If persuasion and consent are the features common to both soft law and TPR then it might be possible that private standard setting might effectively operate even in emergency times. The long-term effects may simply rebalance the relationship with private actors or modify the composition of the private sphere and, at times, even increase their relevance.

A second important aspect, identified by the editors, is that of resilience. They note in the Introduction of this book that:

resilience can also relate to a set of traits that allow an organization or system to overcome adversity either by recovering or, crucially, by reaching a new state of equilibrium. These would entail low connectivity to decrease vulnerability of a system; information flow through feedback loops; or the ability to improvise and reorient, for instance, through emergent leadership; and the learning of new behaviors and organizational patterns. As a consequence, then, resilience should be deemed as including pre-adversity organizational capabilities, capabilities of in-crisis organization and adjustment, and post-crisis resilient responses.

The contributions to the book focus on organizational resilience. The notion of resilience, according to the editors, includes not only the ability to adapt and change to respond to crisis but also resistance. It is preferable to distinguish between resilience and resistance and to correlate resilience with adaptation and change and resistance with lack of change.³² Crises may generate both resilience and resistance and, within an organization, different interests may lead to either one. For example, the doping scandal that affected WADA prompted the organization to adopt strategies of resistance rather than resilience, as persuasively argued in by Tomic and Schmidt in their contribution to this book.³³ S. Tomic and R. Schmidt, “The Accountability Response of the Global Anti-doping Regime to the Russian Doping Scandal” in this volume (Chapter 11). In their account, legitimacy pressures can be a catalyst of a regime’s institutionalization of accountability mechanisms, but the extent of such institutionalization will be limited by the regime’s prior structure. Resilience clearly depends on the impact of change upon the preexisting distribution of power, its influence both within the organization and between the private organizations and the public actors.

In TPR, resilience associated with crises concern both the changes of individual organizations and the web of regulatory relationships within the sector. The impact of a crisis is correlated to the degree of organizational resilience and, more specifically, to the resilience of private actors within the organization (individual resilience) and between organizations (systemic resilience). The correlation between the impact of a crisis and resilience is not linear. Resilience does not necessarily increase or reduce the impact of a crisis; it affects the quality of the impact rather than its intensity. It operates differently for short- and for long-term effects of the crisis.

How does organizational resilience impact on the interactions between public and private actors in transnational regulatory processes? Crises often modify the relationship between public and private actors and redistribute power within the private domain. Usually, crises produce a concentration of regulatory power in the public hands during the time of crisis management. Thereafter, a reallocation of regulatory power between public and private occurs as a long-term effect of the crisis and the resilience of private authority emerges. As aptly illustrated by Nieves-Zárate in her contribution to this book, following the Deepwater Horizon oil spill, organizational changes introduced by the American Petroleum Institute (API) in response to demands and pressures by the US public regulator, resulted in API’s standards to gain more influence in the federal regulatory framework. Within the private domain, crises redistribute power between regulated and beneficiaries and between beneficiaries and those harmed by the regulatory process.

Clearly one relevant aspect to analyse impact is represented by the geographical scope of the crisis. Whether its resolution can be delivered at local (national) level or global intervention is necessary. For example, following the global financial crisis, public policymakers in the United States aimed to address the problem of systemic risk by curbing the bankruptcy privileges of derivatives counterparties. The effectiveness of that solution required other jurisdictions to follow suit as derivatives transactions often include counterparties from multiple jurisdictions. Because it was not clear whether other jurisdictions would do it, policymakers relied on the ISDA amend the contracts commonly used in derivatives markets to achieve similar regulatory effects.³⁴

Often the regional level between national and global tends to be the most appropriate for measuring regulatory resilience. More specifically, the states’ interests in devising collaborative versus non-collaborative solutions to the crisis play a role on the impact of crisis and its resolution. Clearly, the answer depends on the distribution of the costs of the crisis and the distribution of the costs of its resolution. Distributional effects concern the States; often crises determine uneven losses and gains across States but also across the different social constituencies. For example, the global financial crisis hit the real estate market first and then spilled over to many other areas until general taxpayers were involved. In the case of COVID-19, lockdowns harmed touristic and transport sectors first and then had a broader effect on other areas, whereas healthcare facilities and pharmaceutical industries clearly benefited from the crisis.

Resilience of public actors is driven by factors different from those affecting transnational private organizations. The allocation of powers can change within the public domain when the state of emergency is proclaimed as a consequence of the crisis. The recent crises, like that caused by the COVID-19 pandemic or by the war in Ukraine, show a shift from legislative to the executive power and an increasing role of judicial review to ensure that even in emergency times the balance of power is maintained and compliance with rule of law is warranted. Suffice to say that the role of emergency declarations to modify the relationship among powers within the State is not necessary in private organizations where the boundaries between ordinary and emergency often do not require or imply major regulatory changes. This is not to say that emergency crises do not have any impact on the operations of private regulators. Rather, it suggests that the effects of crises on the institutional balance within the organization differ depending on the public/private nature of the organization.

In private organizations, usually the effects of crises are not ex ante regulated. The occurrence of external shocks generates ad hoc reactions rather than being regulated in a systemic fashion. Hence, it is within the private autonomy that individual organizations react to crisis both in relation to their governance and their activity. This is not to say that TPR is impermeable to crises and shocks. But, unlike public organizations such as the State where emergency is the subject of specific rules that guarantee separation of powers and democratic principles, similar rules are not usually adopted in TPR – at least so far. Procedural accountability of transnational private regulators, both toward internal and external stakeholders, is certainly influenced by the emergency and given the recurrence of crises it might be important to define how private regulators should operate in time of crises.

TPR operates in a framework of complementarity with domestic and global public actors. Hence, if the focus should be on the relationship between crises and resilience, a question arises about the unit of analysis. Should resilience only be applied to the individual private regulator or should it also refer to the relationship between private regulators and public actors? In the latter case, the analysis should go beyond organizational and include relational resilience. The question is whether regulatory relationships and interactions are resilient to changes determined by crises. This is particularly important to address how complementarity between public and private actors changes during times of crises.

It is contended that organizational responses concerning individual regulators might differ from relational responses related to the sector and that internal dynamics within organizations, including States, might differ from those concerning the relationships between transnational private regulators and public actors. Institutional complementarity requires focusing on relational in addition to organizational resilience. The presence and influence of international organizations in the context of complementarity can play a significant role in promoting resilience and reducing the disruptive effects of crises. The inclusion of representatives of the International Labour Organization (ILO) within the Steering Committee of the Bangladesh Accord discussed in this book appears to have played such a role.

The issue deserves further empirical investigation, but it is fair to assume that crises modify the relationship between public and private bodies, redistributing the shares of transnational regulatory power. Hence, the core dimension of resilience becomes relational rather than organizational.

Resilience includes not only organizational changes but also relational changes concerning the consequences of the reallocation of power among regulators and of the redistribution of costs and gains from crises.

The institutional effects should be measured by analyzing not only the redistribution of power between states and private regulators but also by their modes of interaction during and after the crisis³⁵. Hence, one should distinguish how crises change the interaction between public and private actors and then identify the dynamics among private actors within TPR generated by crises. Arguably, crises often tend to redistribute powers in favor of public entities and in particular States. This is especially true in relation to rule-making power, less to monitoring compliance.³⁶ In other words, the redistribution of regulatory power between public and private actors determined by crisis is not uniform across the regulatory process and its short-term effects differ from medium- and long-term effects. The investigation should verify how and why the regulatory arena and the allocation of regulatory shares is modified and the extent to which regulatory cooperation and interactions persist or cease to the benefit of the one (private) over the other (public).

I.5 TPR and Its Evolution: The Way Forward

Crises have an impact on transnational regulation. They produce changes that usually differ from those brought about by regulatory failures. To determine the impact of crisis on the regulatory process, it is useful to distinguish between short- and long-term effects. The analysis shows that two intuitive conclusions may deserve greater scrutiny. Intuitively, crises should lead to the centralization of regulatory power and to a more intensive use of coercive rather than persuasive power. Centralization is determined by the need to have faster decision-making. Coercion is justified by the necessity to have more effective decision-making.

Both premises are plausible but too simplistic. There are instances where decentralization and persuasion provide faster and more effective regulatory regimes than centralization and coercion even during crises. In relation to centralization of regulatory power, the main variable is the homogeneity of the regulatory space. Centralization helps if local knowledge is not needed because there is homogeneity across regulated entities. Otherwise, when the regulatory context is heterogeneous and there are power and distributional conflicts among regulated entities, decentralization may be faster and more effective. Coercive force operates when there is general consensus about the rules by their addressees. If there are uncertainty and divergent beliefs among regulated and beneficiaries, persuasion may work better than coercion.

Hence, more empirical analysis is needed to understand when and upon which conditions the objectives of faster and more effective regulatory processes can be achieved after crises have occurred. The notion of resilience, which has become overwhelmingly relevant, may also deserve further elaboration, encompassing not only the organizational dimension but also the relational perspective that has engaged scholars in both the descriptive and normative efforts to explain the evolution of transnational regulation. Resilience is not an independent variable. Regulatory regimes can influence the degree of resilience and the ability to react to shocks and stresses.³⁷ Crises can affect both legitimacy and effectiveness of transnational private regulation. Resilience can contribute to make these challenges an opportunity for change rather than the cause of regimes’ dissolution, but it needs to be steered by both institutional and organizational responses.