Competition Assessment in developing countries: Policy challenges after the global crisis
Maria Fernanda C. Madi and Dr. Vicente Bagnoli
PhD Candidate in Law and Economics at Erasmus University Rotterdam, Netherlands, and Professor of Law at Universidade Presbiteriana Mackenzie, Brazil.
Please cite the paper as:
Maria Fernanda C. Madi and Dr. Vicente Bagnoli, (2017), Competition Assessment in developing countries: Policy challenges after the global crisis, World Economics Association (WEA) Conferences, No. 1 2017, Public Law and Economics, 1st June to 30th June, 2017
Abstract
After the 2007-2008 global financial crisis, the world has been facing persistently low economic growth, particularly in many developing economies where the low growth environment is putting progress and shared prosperity at risk. In addition to this context, numerous laws, regulations and standards, have turned out to restrict competition in the marketplace further than necessary to achieve their policy objectives. This paper aims to address that developing countries, as those in Africa and Latin America, should adopt competition assessments for their new regulation in order to guarantee that their new rules and/or standards will not affect the competition environment in their countries. The paper concludes that governments and/or antitrust authorities should carefully provide a form of assessment, or a general methodology, for identifying unnecessary restraints and developing alternatives to enhance less restrictive policies that could still achieve government objectives.
Dear Madi and Bagnoli,
It is a very interesting topic, I have some general comments and I hope it helps you:
1) Maybe the adoption of competition assessments policies in recent years in developing countries can be a result of the economic crisis, as a way to improve the marketplace conditions and circumvent some of the crisis effects. Also, can be the case that these policies were already on the authorities’ agenda, but the crisis has accelerated its implementation. Do you have a timeline of the adoption in the cited developing countries? Could also be interesting a comparison with the time of adoption in some developed countries.
2) How similar (or different) the policies adopted in the developing countries are to the assessments policies of the developed countries?
3) My opinion is that the paper should include the mentioned analysis to verify in what extend the adopted tools are been actually applied in the developing countries. The assessment policy also needs to be evaluated, and I think that some guidance regarding the effectiveness of the policies adopted in the developing countries would be an invaluable contribution you could provide.
Congratulations for the paper, it is a very important topic!
Dear Carolina,
Thank you so much for the comments.
1-I haven’t thought about the timeline to be honest, but I will check whether there is information available in order to do that. It would be nice!
2 and 3- I will consider this questions to the next draft of the paper. I guess the tools of competition assessment are pretty much the same among developing and developed countries, but developed countried have been adopting it more often and have more expertise to do so. I will definetly add some comment on that, so that it will be clear to next readers.
Thanks agains!
Maria Fernanda
Your paper highlights a very interesting discussion about the competition policy agendas in African and Latin American countries.
I would like you to further analyse the main differences between African and Latin American countries regarding the application of competition assessments to their policy agendas.
Dear Maria and Vicente,
Congratulations on this paper. I found it insightful and highly relevant. I just have some thoughts:
a) There was a discussion of standards vis. competition, that standards may create entry barriers. In trade literature, standards and regulations are opined to have ambiguous effects: some may restrict trade, but others may actually promote and enhance trade. For example, when standards signal quality. In the competition context, is it possible that standards may have efficiency effects? Perhaps by enabling only the most efficient firms to remain in the market?
b) Can you provide some examples of use of competition assessment tools, to help illustrate how these can aid policymakers? These need not be cases from developing countries.
c) You mentioned that “developing countries as those in Africa and Latin America are not that much familiar with such tools”. I just wanted to add that some countries in Asia (i.e. Philippines, Myanmar) either do not have a specific competition law yet, competition authority, or have just recently enacted the competition law. Would the tools discussed here be useful for developing countries with little to no competition law experience?
Congratulations on your paper.
Best,
Gem
Dear Gem,
Thank you for your comments.
1- Yes, of course, there are efficiencies to be considered. I might add it in the next draft to be sure that they weren’t forgot.
2 and 3 – Sure, I will consider these comments to my next version. From what I’ve seen, Asia countries have not started yet the implemention of competition assessment tools, so we initially decided to exclude them from the research, but certainly is something to be considered for the next version.
Thanks again!
Kindly,
Maria Fernanda
This is a very interesting study that highlights the need to implement an competition assessment in the major of developing countries, in the Africa and Latin America, mainly in times of economic crises, in which such countries continues in an embrionary stage of applying competition assessments to their policy agendas. In this scenery, the assessment of government initiatives have a relevant role for promoting of public policy in such countries.
The study focuses very well in the Regulatory Impact Analysis (RIA) and its Competition Assessment, as a practical guide to help policy makers in developing countries to identify and focus on the key barriers to competition.
Congratulations !
Dear all,
I would like to thanks for all comments and inputs that you made in our paper. Maria Fernanda already addressed our replies and we will work to improve it!
Best regards,
Vicente Bagnoli
Dear Madi and Bagnoli,
Your article on competition assessment in developing countries provided a superlative prescription for Sierra Leone in its post-conflict years because the country’s economy appears to struggle between market-oriented and mixed economy. Sierra Leone’s market system is presently undersized, and the application of the Regulatory Impact Analysis (RIA) tool might support policy makers to recognize and emphasize on the crucial obstacles to competition. Even where the government feels the need to enact competition laws and policies, to regulate or remove competition on locally produced goods, these limitations ultimately reduce the entrance to open market and restrain competition, which affects trade openness. Therefore, the application of RIA in Sierra Leone, if effectively utilized, can help promote government’s policies and priorities. I enjoyed your research.
Mahmud Mansaray
Dear Maria,
Vicente,
I enjoyed reading your paper.
Even though it is directly related, I was wondering if you saw that OECD study entitled “Competition and the Financial Crisis” > https://www.oecd.org/competition/sectors/42538399.pdf.
It could be useful in my opinion.
Best,
Thibault