FRAMEWORK FOR COMPETITION REFORMS (FCR) Shreya Kaushik CREW NRG-II Meeting

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FRAMEWORK FOR

COMPETITION REFORMS (FCR)

Shreya Kaushik

CREW NRG-II Meeting

25 th July 2014, Accra

OUTLINE

• Background

(Competition Reforms)

• What is FCR?

• Components of FCR

• FCR & CREW Findings

2

Background

“If countries eliminated policies and practices that distort competition, they could grow rapidly”, Power of Productivity,

William W Lewis (2004)

- Many DCs/LDCs have adopted competition laws in last decade

- However implementation remains limited

- Policies affect competition, markets remain concentrated and anti-competitive practices prevail

- Benefits of competition don’t accrue to consumers, producers

- Low level of understanding and attention of key stakeholders

- Benefits of introducing competition reforms needs to be demonstrated

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Components of Competition Reforms

‘Competition Reforms’ encompass:

(i) Enabling government policies

(ii) Well-designed regulatory framework, empowered institution

(iii) Functional competition regime (policy/law/agency)

4

Framework for Competition Reforms (FCR)

• A guide to plan, execute, evaluate & rectify competition reforms in DCs

PLAN

RECTIFY EXECUTE

EVALUATE

(Re: Shewart Cycle that is used in business management as a tool for continuous improvement of products/processes)

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FCR (contd.)

• Developed for a specific market

• To help key stakeholders appreciate benefits of competition reforms on consumers and/or producers

• Lead to greater attention to the issue - as part of economic planning and reforms in DCs

• Incorporate experience/research findings under CREW

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FCR Preparatory Work

• Need a competition champion to lead

• Formation of a small but decisive team (CRFT)

• Identify need for competition reforms

• Identify the sector/market to be reformed

• Assess ‘ state of the art’

(review of sector, concerns for consumers/producers)

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Steps of FCR

• Planning

• Executing

• Evaluating

• Rectifying

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FCR Step 1:

Planning

• Identify relevant reforms (policies, legislations, statues, programmes) in the selected market

• Understand implications of these reforms on market composition

• Highlight reform intentions (consumers and/or producers welfare)

• Select indicators of consumer and producer welfare

• Prepare a methodology and analytical plan (data collection and analysis)

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FCR Step 2:

Executing

• From the set of selected reforms narrow down to those having pro-competitive or anti-competitive market outcomes

• Gather relevant secondary literature/information and primary data on indicators of consumer & producer welfare

• Interpret current levels of consumer and producer welfare resulting from these reforms (qualitative + quantitative)

• Highlight prevailing concerns vis-à-vis selected reforms

(qualitative + quantitative)

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FCR Step 3:

Evaluating

• Link consumer and producer welfare or concerns with market composition resulting from reforms

Reform

Market

Composition

Consumer/

Producer

Impact

• Record suggestions from consumers, producers, key stakeholders for amendments

• Identify political economy issues in sectors

• Generate a body of evidence

• Start engaging with CRFT members with results

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FCR Step 4:

Rectifying

• Review and discuss results (consumer & producer impacts)

• Plan a process for initiating corrective measures

• Develop a M&E framework to assess and report consumer and producer impacts after ‘corrective measures’ are taken

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Developing FCR based on CREW findings

• Development of outline of FCR

• Draft sectoral FCR (based on CREW experience)

• Incorporation of stakeholders’ views to make adjustments

• Draft FCR (each sector) shared with NRG members in NRG-III and subsequent finalisation

• Used to elicit interest among government/stakeholders for

FCR in other sectors/countries

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Thank You

www.cuts-ccier.org/CREW shk@cuts.org

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