Notice & Comment

Engineering Rules, a Review by Peter L. Strauss

“Engineering Rules” is a clever triple entendre, evoking rules (the industrial standards that are its concern), the emergence of engineering (the profession largely responsible for their creation) and the consensus processes developed over time (the engineering) by which they have been created.  The book is an extraordinarily detailed history of the movement from national to international standards creation and use, a necessary product of the industrial age and the emergence of a global economy.  It introduces as its heroes, in remarkably intimate accounts of their careers, a series of men of rectitude and accomplishment who selflessly built the practice.  The story told is of processes dedicated to finding consensus amongst experts who are professionals first and, if also representatives of particular interests, participating in a process designed to assure the participation of all stakeholders.  The resemblance to American notice-and-comment rulemaking processes is strong, and between the professional commitments of its participants and the stakeholder representation principles often observed, one can think the reasonableness and integrity of outcomes generally sound.

The celebratory characteristic of the book’s narrative leaves darker sides relatively unexplored. Standards have sometimes been generated in processes corrupted by self-interest, and associated with particular patents.  As Tim Buthe and Walter Mattli have shown in “The New Global Rulers The Privatization of Regulation in the World Economy,” the internationalization of standards under the auspices of the International Standards Organization (a practical necessity for the global economy) has often disadvantaged American manufacturers. A common American complaint is that, like each of the 28 members of the European Union, the United States has one vote in the process of choosing among competing standards, each of which may be quite sensible, but one engaging European standard processes or patents (compliance with which is essentially necessary for crossing national boundaries in its single market) and the other American.  With this distribution of votes, the American standard is unlikely to be adopted if a single standard (or access to the European market) is desired. Buthe and Mattli find less block voting than one might expect based on those complaints and  a wealth of evidence to suggest that it really is the poor fit between domestic institutions in the US vs. much greater institutional complementarity in Europe (in product standard setting, only!) that drives the advantage for European firms.  And, they find, US firms with European subsidiaries do almost as well as European firms in product standard setting (and much better than purely domestic US firms).  Smaller actors – innovators, as Prof. Buthe’s comment here points out – are the ones most disadvantaged.

Prof Buthe, like other participants here, points also to the general absence of “civil society stakeholders” from the processes that generate standards. The incorporation by reference (“IBR”) of industrial standards in American agency regulations not only essentially defeats the usual public notice-and-comment processes agencies must follow when adopting regulations, but also generates what amounts to secret law.

In this short comment, it may be useful to remark on other issues about IBR, perhaps not as fully developed in the other comments in this series.

  1. In most of the world, industrial standards are not considered “law,” as such, but guidance about means of complying with legal requirements that must be separately and publicly stated in sufficient detail to inform the general public of the law’s requirements. This significantly defuses the relatively secrecy of the technical standards. But in American IBR practice, this element is not present.  “Engineering Rules” does not remark this difference.
  2. As guidance, standards are readily updated – and, indeed, ANSI and ISO procedures require their regular updating. An IBR’d standard can only be changed by undertaking the expense of notice-and-comment rulemaking, however, with the consequence that a great many legal requirements are seriously outdated.
  3. The National Technology Transfer and Advancement Act, unmentioned in “Engineering Rules,” strongly encourages agency participation in standards-generating processes, and gives industrial standard-setting processes priority over notice-and-comment rulemaking. OMB guidance strongly enforces this priority.  Yet the agency’s participation will not be a part of the rulemaking record should it seek to IBR a resulting standard, and the fact of its participation sharply prejudices the reality of any notice-and-comment process.
  4. An IBR’d standard may itself invoke numerous other standards; agencies required to make the standard publicly available – even in the minimal way in which this must be done – need not keep in their libraries print copies of those incorporated standards.

Standards are an essential element of our economy today, and having this deep and detailed account of their history and development is a remarkable contribution. Yet “Engineering Rules” has some of the characteristics of hagiography, celebrating importance and success, and those whose dedication made that possible.  One misses attention to the other side.

Peter L. Strauss is the Betts Professor of Law at Columbia Law School.

This post is part of a symposium reviewing JoAnne Yates and Craig N. Murphy‘s Engineering Rules: Global Standard Setting since 1880 (John Hopkins University Press). Previous posts in the symposium can be viewed here.

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