Transcript Figure 2 Per Capita GDP (constant 2000 USD in thousands

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]
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 freemarket based system….” (R.Rajan & L.Zingales, The
Road to Prosperity:Saving Capitalism from Capitalists,
Transition, 2003)
Number of Countries with Competition Laws by Region
Africa
No of countries:
47 + 3 regional
integrations
East Asia
and
Pacific
No of
countries:
32
No of countries
with a
Competition
Law: 17
(including
regional
integrations)
CL: 13
No. of IDA
countries:
11/39
Latin
America
and
Caribbean
+North
America
No of
countries: 35
+ 2 regional
integrations
Europe
and
Central
Asia
No of
countries:
57 + 1
regional
integration
Middle
East, North
Africa
No of
countries: 21
South Asia
No of
countries: 8
CL: 19
(including
regional
No. of IDA integrations)
countries:
4/13
No. of IDA
Countries:
2/9
CL: 47
(including
regional
integration
s)
CL:7
CL: 3
No. of IDA
Countries:
0/2
No. of IDA
Countries:
3/8
No. of IDA
Countries:
8/10
Figure 1
Per Capita GDP (constant 2000 USD in thousands) and Intensity of
Competition in Local Markets
40
High
IDA Countries
Non-IDA countries
35
30
GDP Per Capita
25
20
15
10
5
Low
0
Low Intensity
Intensity of Local Markets Competition
High Intensity
Source: Global Competitiveness Report 2006-2007 and World Bank DDP, 2005
Figure 2
Intensity of Local Markets Competition and Effectiveness of Competition
(Antitrust) Law- Policy
IDA
Non-IDA countries
Intensity of Local Markets Competition
High
Low
Low
Effectiveness
Effectiveness of Competition (Antitrust) Law-Policy
High
Effectiveness
Source: Global Competitiveness Report 2006-2007
Figure 3
Effectiveness of Competition (Antitrust) Law- Policy and the Extent of Market
Dominance
High
Dominance
Non-IDA countries
Extent of Market Dominance
IDA
Low
Dominanc
e
Effectiveness of Competition (Antitrust) Law-Policy
Low
Effectiveness
High
Effectiveness
Source: Global Competitiveness Report 2006-2007
Figure 4
Business Competitiveness Index and Effectiveness of Competition (Antitrust)
Law-Policy
Business Competitiveness Index
High
Low
IDA
Low
Effectiveness
Effectiveness of Competition (Antitrust) Law-Policy
Non-IDA countries
High
Effectiveness
Source: Global Competitiveness Report 2006-2007
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