Transcript Rationale & Justification of Countries/Sectors

Partners’ Meeting
Selection of CREW
Countries & Sectors
Pooja Pokhrel
Nathan India (Pvt.) Ltd.
15 March 2013, Jaipur
CREW Country Selection
Conditions
•
•
•
•
•
2 countries from Africa and 2 from Asia
At least one SADC country
At least one ASEAN member state
At least two DFID priority countries
History of CUTS engagement in each
country
• Only Anglophone countries in Africa
1
Empirical Evidence
• Very few studies deal with what
contributes to the highest impact of
reform
• Kronthaler (2010) studies what
contributes to effectiveness of
competition reform
• Level of economic development,
Control of Corruption, and the time a
competition law exists matter
2
Data seems to confirm…
Regulatory quality seems to improve as per capita income rises.
Average Values for the Years 2007-2011
25.00
Regulatory Quality
20.00
15.00
10.00
5.00
0.00
0
-5.00
Source:
1000
2000
3000
4000
5000
6000
GDP per capita, PPP
World Development Indicators for GDP per capita;
World Governance Indicators for Regulatory Quality Index
3
Data seems to confirm… (Contd.)
Regulatory quality is positively correlated to the control of corruption.
Average Values for the Years 2007-2011
1.00
Control of Corruption Index
0.50
0.00
-3.00
-2.50
-2.00
-1.50
-1.00
-0.50
0.00
0.50
1.00
-0.50
-1.00
-1.50
Regulatory Quality Index
-2.00
Source: World Governance Indicators for Regulatory Quality Index
4
Country Selection Approach
• Start with 99 countries in Asia and
Africa
• Employ a 3-step screen:
―Step 1: Income considerations
―Step 2: Considerations of effectiveness in
existing policies
―Step 3: CREW implementation
considerations
5
Step 1: Income Considerations
• Focus on developing countries (only LI
& LMI)
―Immediately eliminates 32 countries,
including Brunei and Singapore in ASEAN
• Screen out countries with per capita
income of less than $600
―Proxy for level of economic development
―44 countries remaining
6
Step 2: Effectiveness of Policies
• Avg. WEF index “Effectiveness of anti-monopoly
policies” for past 2 years<= 3.5
― Variable of interest
― 33 countries remaining
• Avg. WGI “Regulatory Quality Index” for past 5
years<= -1.0
― Competition policy embedded with regulatory environment
― 19 countries remaining
• Avg. WGI “Control of Corruption Index” for past 5
years <= -1.0
― Consistent with Kronthaler & data correlation
― 16 countries remaining
7
Step 3: Implementation
Considerations
• Countries with CUTS experience
• Only Anglophonic countries
• Arrive at a list shortlist of 8 countries, of
which 2 (Nigeria & Ghana) do not have
a competition law in place
• Final shortlist of 7 countries
―Africa: Ghana, Zambia
―Asia: India, Indonesia, Philippines, Sri
Lanka, Vietnam
8
Sector Selection Approach
• Based on sector characteristics
―Existence of sector policies and other
signs of sectoral reform
―Nature of market
―Impact on the poor
―Data Availability
• Assign scores to make objective crosscountry comparisons
9
Sector policies & reform
• Score ranging from 0 to 4.
―0: No sector regulation or policy
―1: Sector policy but no sector regulation
―2: Sector policy and/or sector regulatory law
―3: Also a sector regulator
―4: Additional signs of reform.
10
Nature of Market
• Review number of market players,
market shares, influence of SOEs
• Score ranges from 1 to 3
―1: Primarily a monopoly or if there are no
organized market players
―2: Has one or a few large players with
some other smaller participants
―3: Seems to have multiple market players
and competition.
11
Data Availability
• Reviewed based on proposed CREW
methodology
• Assign score ranging from 1 to 3
―1: Aggregate-level data available
―2: Micro-level household and/or firm data
available
―3: Relevant data, particularly at the microlevel available, both before and after
reform.
12
Impact on the poor
• Review focused on current reach of the
sector to the poor, proportion of the
poor’s expenditure on sector
• Assign score between 1 and 2
―1: Relatively less impact
―2: Relatively high impact
13
Sector Selection
• Reviewed 6 sectors
―Domestic Fuel
―Electricity
―Passenger Transport
―Pharmaceuticals
―Staple Food
―Telecommunications
• For 7 shortlisted countries
• Only sectors, not product markets
14
Country/Sector Scorecard
Electricity
6
Telecom.
10
Pharm.
10
Domestic
Fuel
6
India
9
11
11
9
10
10
60
Indonesia
9
11
11
7
10
8
56
Philippines
10
10
10
8
9
9
56
Sri Lanka
8
9
9
5
9
7
47
Vietnam
8
8
8
6
8
8
46
Zambia
7
9
9
7
9
7
48
57
67
68
48
63
56
Ghana
TOTAL
Passenger
Transport
8
Staple
Food
7
TOTAL
47
15
Proposed Countries & Sectors
• Sectors
― Passenger Transport, Staple Food
• Countries
―Ghana, India, Philippines, and Zambia
16
Thank you!
17