“How Can Competition reforms be an Opportunity for Policy Makers in Developing Countries” William E. Kovacic George Washington University Law School Dhaka July 2, 2012 Seminar Benefits of effective implementation of Competition reforms in Bangladesh

Two Recurring Questions For Policy Makers in Developing Countries How Does Competition Law – Strengthen Economic Performance? – Improve Domestic Industry? Competitiveness and employment These Questions Never Go Away

Competition Policy and Economic Performance: Three Effects Growth Innovation Economic Opportunity and Social Mobility

Typical Policy Context Policy Options to Promote Economic Progress – Competition policy – Subsidies for specific categories of firms – Public ownership or comprehensive regulation – Public/private partnerships – Some are complements, some are substitutes – Most countries try them all; the ideas never die

Overview Competition Policy Defined Goals Competition Policy Strategy to Promote Growth and National Competitiveness Implications for Competition Agencies Contact:

Competition Policy Enforcement of Prohibitions on Private and Public Conduct that Curbs Rivalry Advocacy before Other Public Bodies Education and Guidance Research

Competition Policy Goals Economic Progress: Superior Efficiency, Innovation, Growth Distribution Considerations Political Aims A Life Cycle Theory of Competition Agencies

A Competition Policy Strategy with Three Contributions Economics Public Administration Political Science

Economics Increase Value from Public Expenditures Promote Domestic Economic Integration Improve Performance in Key Network Sectors Facilitate New Entry and Expansion Preserve Benefits of Privatization

Increase Value from Public Expenditures Public Procurement Pathologies What’s at Stake Competition Policy Antidotes – Anti-collusion policy – Cooperation between competition authorities and procurement offices

Promote Domestic Economic Integration Law Enforcement to Challenge Private Market Allocation Schemes Advocacy to Dismantle Barriers to Inter- Regional Trade

Improve Performance in Key Network Sectors Focal Points: Transportation, Communications, Energy, Finance Competition Policy Tools – Abuse of dominance oversight – Anti-cartel program – Merger control – Advocacy before sectoral regulators

Facilitate New Entry and Expansion Law Enforcement – Abuse of dominance oversight – Merger control – Anti-cartel programs Advocacy – Unnecessary requirements for licenses, permits – Subsidy programs that reinforce incumbents only

Preserve Benefits of Privatization Merger Control Abuse of Dominance and Legacy Firms

Public Administration Competition Agency as Prototype – Transparency measures – Recruiting and training

Political Science Bridge from Planning to Market Processes Voice for Decentralized Economic Decisionmaking – Agency as educator and advocate

Conclusion: Implications for Competition Authority Clear Definition of Goals Conscious Process for Setting Strategy Portfolio of Policy Instruments Investments in Knowledge Evaluation Human Capital Continuous Upgrades