Framework for Competition Reforms (FCR): Guiding Principles Rijit Sengupta CUTS International CREW International Conference 19 th Nov 2014, Bangkok.

Framework for Competition

Reforms (FCR):Guiding Principles

Rijit SenguptaCUTS International

CREW International Conference19th Nov 2014, Bangkok

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What is it?• Guidance for DC policymakers and practitioners about steps for

promoting competition reforms in sectors• Easy to comprehend for civil society actors too• Rationale: DC policymakers are not able to give adequate

priority to promoting competition in sectors• Policies distort competition in markets – CAs can’t do much• Based on experience, CUTS intends to strengthen DC

constituencies for competition reforms: has to go beyond the CA• Possible if:

- benefits are well-demonstrated- process is well-defined and planned- implementation is not expensive- involves multiple SH engagement support

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Framework for Competition Reforms (FCR) is envisaged as a step-wise reference for DC

policymakers and practitioners to promote competition reforms in key sectors………….

COMPETITION REFORMS FOR ENHANCING SOCIAL AND ECONOMIC WELFARE IN DCs

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Outline

• Identifying the sectors• Fixing indicators: consumer & producer

welfare• Identifying & examining sectoral policies• Short-listing ‘relevant’ policies & practices• Assessing welfare implications• Building evidence base and its application• Ensuring local buy-in & ownership• Initiating actions by local SHs• Addressing challenges encountered

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1. Identifying Sectors

• Based on certain criteria• Sign of reforms• Presence of a regulatory framework and institution• Key sectors for ordinary consumers and small producers

(impact)• Nature of markets – dominant players, SoEs, monopolies• Data availability• Of interest to civil society actors

CREW Project Background Paper

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2. Fixing Indicators: Consumer & Producer Welfare

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Consumer Welfare Access Choice Price Quality/Price Time Saving

Producer Welfare Access to inputs Easy of entry Growth Investments Cost savings

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3. Identifying and Examining sectoral policies and practices

• Policy basket: sectoral policies, laws, sectoral programmes, statutory instruments, administrative orders

• Examining policies by applying existing tools (CAF, CAT, CIAT…..), stakeholder feedback & anecdotal evidence

• Nature of market: Porter’s 5 Forces, concentration measures • Identifying possible anti-competitive practices – stakeholder

feedback and existing information

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4. Short-listing of Policies and Practices (pro/anti-competitive market outcomes)

• Short-listing of policies/practices that clearly make a case• Pro/anti-competitive effects on the market • Not too many, not too few (from each sector)• Significance of implications especially on ordinary consumers

and small producers• Stakeholder agreement on the short-list

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5. Assessing welfare implications of policies and practices – evidence from CREW countries

• Obtaining ‘secondary data’ from available sources• Identification of various tools for the application • Analysing secondary data using various tools/methods to

assess impact of policies/practices on beneficiaries (using ‘welfare indicators’)

• Conduct primary perception surveys• Analyse primary data to ascertain welfare impacts ((using

‘welfare indicators’)

COUNTRY-SPECIFIC STORIES OF IMPLICATION OF PRO/ANTI-COMPETITIVE POLICIES ON CONSUMERS/PRODUCERS

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6. Building the evidence and planning its application in countries/sectors

• Links pro/anti-competitive policies and welfare effects• Helps ascertain impact of anti-competitive practices on

beneficiaries• Challenges of attribution• Plan the application of the evidence

- Further research/evidence- Identifying users of evidence- Plan for influencing policy- Stakeholder discussions (govt, business, CSOs)

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7. Ensuring local buy-in and ownership

• Engagement of multi-stakeholder group right from the beginning of the process – National Reference Group/NRG

• Continuous interaction and exchanges (including one-to-one) with senior policymakers and decision-makers

• Convince stakeholders of usefulness of evidence• Ensuring government support, buy-in and local ownership of

findings• Developing locally owned national advocacy agenda

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8. Initiating actions led by local SHs

• Engaging a multi-stakeholder group to oversee actions (monitor) and assess results

• National advocacy agenda reviewed and agreement reached• Initiate actions to for desirable changes (consolidate positive

impacts and address negative impacts)• Target ‘low-hanging’ outcomes/results• Periodically monitor results• Reporting mechanisms

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9. Addressing challenges encounteredChallenges Resolving Challenges

Quantitative data - Data is present but not available easily in one place- Primary data could be obtained- Qualitative data can provide useful information

Vested interests - Employing a multi-stakeholder process- Engaging with some of the high ‘influence’ SHs- Identify ‘Friends of Competition’

Technical component

- Engage with experienced organisations- Refer existing tools/methods

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Thank Youwww.cuts-ccier.org/CREW