Legal Metrology's Impact On The Economy Of A Developing Society


Kenneth Arrow the Nobel laureate in Economics commented:

"Virtually every commercial transaction has within itself an element of trust, certainly any transaction conducted over a period of time. It can be plausibly argued that much of the economic backwardness in the world can be explained by the lack of mutual confidence;..."

From it's beginning, measurement was recognized as a provider of objective information. However, when used in trade, transactions where the measurement process lacked transparency and there was asymmetry of information between the trader providing the measurements and the trader accepting these measurements (usually the purchaser in retail transactions, the producer in farm produce transactions and the smaller business in commercial transactions) then there was considerable scope for uncertainty, dispute, transaction costs and market inefficiency. These transaction costs can result from concerns about the accuracy of the measurement [e.g. short measure] and the consistency of the measurement [e.g. paying more than other customers].

The World Bank in its 1997 World Development Report on "The State in a Changing World" made the point that; "an effective State is vital for the provision of the rules and institutions that allow markets to flourish. Without it sustainable development both economic and social is impossible".

Consumer protection

Measurement, and goods packed by measure, has generally replaced number and simple measures (bucket, plate etc.) as the basis of transaction for a wide range of consumer commodities and products. The increased consistency of these measurements, when adequately controlled, has significantly reduced disputes and fraud and increased the efficiency of the marketplace.

Level playing field for commerce

Metrological control ensures fair trading by eliminating the use of short measure to obtain commercial advantage over competitors in the market place and through pattern approval of measuring instruments ensures that measuring instruments that are manufactured and sold, are fit-for-purpose and are to internationally recognized standards. Pattern approval and certification also ensures that the design of measuring instruments do not facilitate fraud.

Full collection of government excise and taxes based on measurement

Governments of both developed and developing nations collect significant amounts of revenue through excise and resource rent taxes based on measurement.

Full national benefit for commodity exports

Export income from the sale by measure of bulk and pre packed commodities is a significant component of both export and national income. Often for reasons of jurisdiction or lack of technical capability these measurements are not metrologically controlled by the State with a consequent risk of loss of national income.

Developing countries have even greater concerns. To meet the short measure requirement of trade contracts, commodity export countries give away value to the extent of the uncertainty of the measurement.

6 Regulatory Metrology

Governments now use measurements in a wide range of government regulations, particularly for the environment, health and safety, traffic control and medicine. The benefits of legal metrology in these applications include

  • Increased compliance
    • Legal measuring instruments are able to provide continuous monitoring and greatly increase the probability of apprehension. The objectivity of the measurements also provides enhanced acceptance by industry and the community.

  • Sound evidential basis for the measurements
    • The legal metrology authority provide a sound evidential basis for regulatory measurements by providing for certification of standards, measuring instruments, measurements and reference materials under National Measurement Legislation. Without such certification the measurements may be incorrectly interpreted.

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