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This presentation was given by John Davies, Head of the OECD Competition Division during the launching event of the Romanian Competition Assessment project in Bucharest, 15/10/2014. More at: www.oecd.org/daf/competition
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COMPETITION ASSESSMENT
John Davies, Head, Competition Division
October 2014
Regulation can stifle growth by
hampering productivity
Source - Arnold, J., Nicoletti, G. and Scarpetta, S. (2011). “Does anti-competitive regulation matter for productivity? Evidence from European firms”. IZA Discussion Paper No. 5511.
Increase in multi-factor productivity compared to regulatory stance
Fa
ster
gro
win
g
More regulated
Pro-competitive reform can help
Source: OECD. *Three-year moving average
-4
-2
0
2
4
6
8 Smoothed* GDP growth - Australia and OECD
Australia
OECD - Total
"Hilmer reforms": competition assessment of all new and existing laws
and regulations
OECD has developed a Toolkit
Step One: Competition
Checklist: Does the Law
or Regulation: Limit the number or
range of suppliers?
Limit the ability of
suppliers to compete?
Reduce the incentive of
suppliers to compete
vigorously?
Restrict consumer choice?
OECD has developed a Toolkit
Step Two: Full evaluation
of selected rules
Identifying the underlying policy objectives;
Stating alternative regulations;
Evaluating the competitive effects of each alternative; and,
Comparing the alternatives.
OECD has developed a Toolkit
Applied in Mexico in joint project with competition agency covering:
• Banks
• Airports
• Limits on foreign participation in:
– Telecoms
– Broadcasting
– Transportation
• Municipal regulations
Reviewed 4 sectors in Greece, totalling 21% of GDP, in 2013
Issue Annual Benefit Number of provisions affected
Value, €m
“Fresh” milk €33m (consumer benefit/year) 2 33
Levy on flour €8m-11m (value of levy/year) 1 8
Sunday trading €2.5bn (annual expenditure), plus 30,000 new jobs
3 2 500
Sales and discounts €740m (annual turnover) 9 740
Over the Counter pharmaceuticals €102m (consumer benefit/year)
23 102
Marinas €2.3m (annual turnover) 10 2
Cruise business €65m (annual turnover) 4 65
Advertising €1.8b (consumer benefit/year) 14 1 800
Everything else ??? 263 ???
Total: €5.2bn + ???
Romania has more regulated product markets than OECD countries
0
0.5
1
1.5
2
2.5
3
3.5
Ind
ia
Ch
ina
Bra
zil
Tu
rkey
Ind
on
esia
Ru
ssia
n F
ed
era
tio
n
So
uth
Afr
ica
Isra
el
Cro
ati
a
Me
xic
o
Ko
rea
Gre
ece
Slo
ven
ia
Ro
ma
nia
Cy
pru
s
Po
lan
d
La
tvia
Bu
lga
ria
Ma
lta
Sw
eden
Lit
hu
an
ia
Ch
ile
Sw
itze
rla
nd
Icel
an
d
Fra
nce
No
rwa
y
Lu
xem
bo
urg
Irel
an
d
Sp
ain
Ca
na
da
Ja
pa
n
Cze
ch R
ep
ub
lic
Bel
giu
m
Slo
va
k R
epu
bli
c
Hu
ng
ary
Po
rtu
ga
l
Ger
ma
ny
Fin
lan
d
Est
on
ia
Au
stra
lia
Ita
ly
Ne
w Z
eala
nd
De
nm
ark
Au
stri
a
Un
ited
Sta
tes
Un
ited
Kin
gd
om
Ne
ther
lan
ds
Source: OECD 2013: http://stats.oecd.org/Index.aspx?DataSetCode=PMR#
0
0.5
1
1.5
2
2.5
3
3.5
4
Ind
ia
Ch
ina
Bra
zil
Tu
rkey
Isra
el
Me
xic
o
Ma
lta
So
uth
Afr
ica
Sp
ain
Cy
pru
s
Icel
an
d
Ro
ma
nia
La
tvia
Ch
ile
Cro
ati
a
Irel
an
d
Ind
on
esia
Gre
ece
Ko
rea
Cze
ch R
ep
ub
lic
Slo
ven
ia
Bel
giu
m
Lu
xem
bo
urg
Sw
eden
Bu
lga
ria
Hu
ng
ary
No
rwa
y
Au
stra
lia
Fra
nce
Ja
pa
n
Ger
ma
ny
Po
lan
d
Lit
hu
an
ia
Est
on
ia
Sw
itze
rla
nd
Fin
lan
d
Ru
ssia
n F
ed
era
tio
n
Un
ited
Kin
gd
om
Po
rtu
ga
l
Ca
na
da
Au
stri
a
De
nm
ark
Un
ited
Sta
tes
Ita
ly
Ne
ther
lan
ds
Ne
w Z
eala
nd
Slo
va
k R
epu
bli
c
Romania has relatively high barriers to entrepreneurship
Source: OECD 2013: http://stats.oecd.org/Index.aspx?DataSetCode=PMR#
• Review three sectors:
– Food processing
– Transport (freight)
– Construction (materials, tenders)
• Joint team OECD-RCC
• OECD report to Government of Romania
• Detailed recommendations for implementation
• Capacity building and knowledge transfer
Plan for joint work with Romanian
Competition Council