Breakout on An Assessment of CP
Institutional Machinery: Methods used
in Competition Agencies and what
Worked for Them
Competition Policy Implementation Working Group: Subgroup 2
(Experiences of Younger Agencies)
Prof. Dr. Francisco Marcos (fmarcos@profesor.ie.edu)
Professor of Law, IE Business School
Director, Competition Service
Moscow, 30th may 2007
Agenda
1. Relevance of institutional floor & institutional settings.
2. Challenges to CP institutional machinery. Dynamic and
continuous reassessment of rules and activities.
3. Strategic Planning: Goals/Commitments. Knowledge
database construction.
4. Enhancement of Administrative infrastructure &
procedures.
5. Some further reflections.
1. Relevance of institutional floor & institutional settings (I)
“Institutional soil” crucial in rooting CP… (NIE would cover
also institutional atmosphere)
NARROW VIEW: Organization, Design, Operation &
Procedures in charge of implementation and enforcement of
CL (+manageable and understandable).
Clear understanding of relationship between CP and CL in
each system (which indeed may vary) lie at the foundation of the
institutional machinery in charge and determine design and
operational variations.
1. Relevance of institutional floor & institutional settings (and II)
Greater consciousness of importance of institutional
strengths and weaknesses: discussion about substantive topics
may lack relevance if the later prevent them to be applied
Major lesson must be clear from beginning & Subgroup 2 work
shows that: no one size fits all!
(more than with substantive or material rules and prohibitions)
See, for example, Michael J. TREBILCOCK and Edward M. IACOBUCCI, “Designing Competition
Law Institutions”, World Competition 25/3(2002) pages 361–394.
However, having a look at other institutional experiences may
provide valuable learnings, specially for younger authorities….
Agenda
1. Relevance of institutional floor & institutional settings.
2. Challenges to CP institutional machinery. Dynamic and
continuous reassessment of rules and activities.
3. Strategic Planning: Goals/Commitments. Knowledge
database construction.
4. Enhancement of Administrative infrastructure &
procedures.
5. Some further reflections.
2. Challenges to CP institutional machinery (I).
Dynamic and continuous reassessment of rules and activities from the
beginning. Comparisons across-time and across-countries.
Adapt traditional rules & commands to specific and peculiar
national setting (f. e., to make it more effective/efficient)
(i) GOALS of CP: consumer welfare, technological progress;
enhanced efficiency, international competitiveness; export
success; small and medium enterprises, business cycle
stabilization; employment concerns;regional development
concerns; security of supply….
(ii) MATERIAL CONTENTS (& changes): merger policy, public
aid, relation with regulation…
2. Challenges to institutional machinery (and II).
(iii) ENFORCEMENT STRUCTURE: judicial/administrative organs,
federal states, institutional reshuffling, appointment of members of
authority
No optimal design exists!!!
(iv) ENFORCEMENT POWERS & CAPABILITIES: variable
operational features, cruciality of economic analysis (…) leniency,
etc. Again, no optimal design: forget searching for Mobby-Dick!!
(v) RESOURCES: budget, personnel (how to retain & hire best
human capital?)
(vi) INTER-INSTITUTIONAL & CROSS-BORDER
COOPERATION
Agenda
1. Relevance of institutional floor & institutional settings.
2. Challenges to institutional machinery. Dynamic and
continuous reassessment of rules and activities.
3. Strategic Planning: Goals/Commitments. Knowledge
database construction.
4. Enhancement of Administrative infrastructure &
procedures.
5. Some further reflections.
3. Strategic Planning. Goals & Committments
A. Portfolio of responsibilities. Matching of committments to
capabilities & resources, from simple rules to complex rules (f. e.,
merger policy).
B. Priorities and Periodically assessed (annual reviews).
C. Policy instruments….
- Not just CL enforcement….
- Advocacy and education (business outreach & awareness
campaigns…). Sector studies.
- Relationship with complementary & overlapping policies (f. e.,
trade, public procurement, but specially as a monitoring tool in
post-privatization time and transition from planned economy).
See f.e., Timothy J. Muris, “Principles For A Successful Competition Agency”,
University of Chicago Law Review, Vol. 72, No. 1, Winter 2005, pages 165-187
Agenda
1. Relevance of institutional floor & institutional settings.
2. Challenges to institutional machinery. Dynamic and
continuous reassessment of rules and activities.
3. Strategic Planning: Goals/Commitments. Knowledge
database construction.
4. Enhancement of Administrative infrastructure &
procedures.
5. Some further reflections.
4. Enhancement of Administrative Structure & Procedures
The way to better infraestructures and better procedures.
WHAT IS BETTER?
Several values may be at play (independence, accountability,
predictability, flexibility, etc) and their relative relevance in each
national setting may change the organizational & procedural
outcome.
- Transparency (to build confidence).
- IT (a proof of adapting institution capabilities to those of potential
antitrust violators).
- Economic Analysis….. office for chief economists.
- Quality control methods…
Agenda
1. Relevance of institutional floor & institutional settings.
2. Challenges to institutional machinery. Dynamic and
continuous reassessment of rules and activities.
3. Strategic Planning: Goals/Commitments. Knowledge
database construction.
4. Enhancement of Administrative infrastructure &
procedures.
5. Some further reflections.
5. Some further reflections (I)
A. Enrich database with data from broader institutional
background (other major legal/political/cultural/social traits that
affect market functioning, condition CP implementation and,
therefore, institutional settings).
LEGAL TRADITION. See f.e. Cassey LEE, “Legal Traditions and Competition Policy,” Quarterly
Review of Economics and Finance, Vol.45, 2005, pages 236-257; contra Armando E. RODRIGUEZ,
“Does Legal Tradition Affect Competition Policy Performance?”, Journal of Business & Economic Studies,
vol. 1, nº 1, spring 2007.
POLITICAL INTERFERENCE (Agency independence). See f.e. Stephan VOIGT,
“The Economic Effects of Competition Policy – Cross- Country Evidence Using Four New Indicators”, WP
2006, available at www.ssrn.com
5. Some further reflections (II)
B. Place it in the context of available relevant work in the
area and, if possible, profit from it. Some examples:
CP agencies human resources policies (Tomás SEREBRISKY, “What Do
We Know about Competition Agencies in Emerging and Transition Countries? Evidence
on Workload, Personnel, Priority Sectors, and Training Needs”, World Bank Policy
Research WP 3221, Feb. 2004) or
Foreign assistance programs and their effectiveness (Michael W.
Nicholson, D. Daniel Sokol and Kyle W. Stiegert, “Assessing the efficiency of
antitrust/competition policy technical assistance programs” 2006 ICN Cape Town
Conference).
5. Some reflections (III)
C. Problem of objetivity of the data (agency survey….,
quantitative elements tend to be rather formal and may miss
relevant elements of picture). Annual reports cross-checking may
decrease subjectivity.
D. (Extension) Detailed analysis of major antitrust
institutional feature: sanctions (What kind?). Description of
antitrust crime dimmension…if exist or if ever used.
5. Some reflections (and IV)
E. (Extension) Do the Real assessment of the institutional
machinery!! The “Market for CP institutional settings”??
Analyze impact on economic growth, performance and
productivity (more relevant to measure/calculate than in the
case of material and substantive rules variations). Some recent
attempts: Keith n. HYLTON and Fei DENG, “Antitrust around the world: an empirical
analysis of the scope of competition laws and their effects”, Boston University School of
Law, L&E WP nº. 06-47, 2006; Michael KRAKOWSKI, “Competition Policy Works: The
Effect of Competition Policy on the Intensity of Competition – An International CrossCountry Comparison”, Hamburgisches Welt-Wirtschafts-Archiv (HWWA) Hamburg
Institute of International Economics, Discussion Paper 332, 2006; Armando E.
RODRÍGUEZ and Lesley DENARDIS, “Examining the Performance of Competition
Policy Enforcement Agencies: Country Comparison” Journal of Business & Economic
Studies, Vol. 13, No. 1, Spring 2007.
THANK YOU FOR YOUR ATTENTION !!!