Competition Policy and Economic Development by Rughvir (Shyam) Khemani Advisor, Competition Policy...
9
Competition Policy and Economic Development by Rughvir (Shyam) Khemani Advisor, Competition Policy Financial and Private Sector Development Vice-Presidency The World Bank Group Washington DC United States Email: [email protected]
-
Upload
christina-mason -
Category
Documents
-
view
218 -
download
6
Transcript of Competition Policy and Economic Development by Rughvir (Shyam) Khemani Advisor, Competition Policy...
Competition Policy and Economic Development
byRughvir (Shyam) Khemani
Advisor, Competition PolicyFinancial and Private Sector Development
Vice-PresidencyThe World Bank Group
Washington DCUnited States
Email: [email protected]
Constraints to Promoting Competition in Developing and Emerging Market
Economies•Inherent high industry/market and ownership concentration in product & financial markets.• Entrenched firms & other stakeholder-interest groups, close or opaque government-business relations lobbying, rent-seeking behavior, corruption & bribery• Underdeveloped capital & financial markets, insufficient sources of commercial information, and related ‘business’ infrastructure…….• Weak legal framework, contract enforcement, property rights• Institutional capacity, resource, skills, knowledge constraints, staff turnover• Lack of political will/ competition culture.
The Tyranny of Predatory Vested Interests: Competition Can Be Thwarted …
“The corrupt version of capitalism—when powerful corporations deliberately try to eliminate healthy competition to preserve their privileged position—generates economic inefficiencies and social injustice, thereby undermining political support for the free-market based system….” (R.Rajan & L.Zingales, The Road to Prosperity:Saving Capitalism from Capitalists, Transition, 2003)
Number of Countries with Competition Laws by Region
AfricaNo of countries: 47 + 3 regional integrations
East Asia and Pacific No of countries: 32
Latin America and Caribbean +North AmericaNo of countries: 35 + 2 regional integrations
Europe and Central AsiaNo of countries: 57 + 1 regional integration
Middle East, North Africa No of countries: 21
South Asia No of countries: 8
No of countries with a Competition Law: 17 (including regional integrations)
No. of IDA countries: 11/39
CL: 13
No. of IDA countries: 4/13
CL: 19(including regional integrations)
No. of IDA Countries: 2/9
CL: 47(including regional integrations)
No. of IDA Countries: 8/10
CL:7
No. of IDA Countries: 0/2
CL: 3
No. of IDA Countries:3/8
Figure 1Per Capita GDP (constant 2000 USD in thousands) and Intensity of
Competition in Local Markets
Source: Global Competitiveness Report 2006-2007 and World Bank DDP, 2005
0
5
10
15
20
25
30
35
40
Intensity of Local Markets Competition
GD
P P
er
Ca
pit
a
IDA Countries Non-IDA countries
Low
High
Low IntensityHigh Intensity
Figure 2Intensity of Local Markets Competition and Effectiveness of Competition
(Antitrust) Law- Policy
Source: Global Competitiveness Report 2006-2007
Effectiveness of Competition (Antitrust) Law-Policy
Inte
ns
ity
of
Lo
ca
l Ma
rke
ts C
om
pe
titi
on
IDA Non-IDA countries
Low Effectiveness
High Effectiveness
Low
High
Figure 3Effectiveness of Competition (Antitrust) Law- Policy and the Extent of Market
Dominance
Source: Global Competitiveness Report 2006-2007
Effectiveness of Competition (Antitrust) Law-Policy
Ex
ten
t o
f M
ark
et
Do
min
an
ce
IDA Non-IDA countries
Low Dominance
Low Effectiveness
High Effectiveness
High Dominance
Figure 4 Business Competitiveness Index and Effectiveness of Competition (Antitrust)
Law-Policy
Source: Global Competitiveness Report 2006-2007
Effectiveness of Competition (Antitrust) Law-Policy
Bu
sin
ess
Co
mp
etit
iven
ess
Ind
ex
IDA Non-IDA countries
High Effectiveness
Low Effectiveness
Low
High
Key Factors for Successful Competition Law and Policy Implementation
• Complementary, broader ‘systemic’ public policies and regulations impeding competition also need to be simultaneously or sequentially addressed (trade, investment, ‘doing business’…reforms) •Well designed CLP, specialized agency, well resourced-financial and human capital•Independence of/safeguards to protect competition agency, case review and adjudication process from political and business pressures‘Demand’ driven process…in response to credible complaints• Broad public understanding of benefits and support for competition
