Eberhard Feess Summary of first session: Potential lessons for CREW Two different issues Owen: Impact of a bundle of sector-relevant measures (deregulation, removal of barriers to entry,…) on sectors (and beyond) Natalie: Impact of enforcement of competition law My procedure Discuss insights from the two presentations separately; Some points of the discussion referring to both presentations.

Owen (not very controversial) 1)Identifying and quantifying direct impacts on sectors - Core of CREW - Plenty can be learned from Australia -Factors: Prices, productivity,… but also: quality (waiting loops), impact on single firms… -Key-points for data -Before-after required -Data for difference-in-difference -Timing issue (already implemented - then primary data collection is excluded - or not

2) Estimating economy-wide impacts - Computable GEM: Methodologically advanced, prohibitively high data requirements (?)….and should be complementary to World Bank Studies (?) - Not the core of CREW, but still very important (see agriculture example). “Soft” analysis: Links between sectors, sectors most directly affected, interviews, qualitative assessment…

3)Disentangling the impact of different measurements -Generally important for CREW (?), but: Hardly possible with “hard” analysis: Panel data with sufficient variation and observations would be required. -Again: “Soft” analysis: Links between sectors, sectors most directly affected, interviews, qualitative assessment…for identifying which of the parts of the reform are crucial.

Natalie (far more controversial) 1)CS vs. CS+PS Pros: -Pragmatism -Due to positive long-term (“dynamic”) effects, static CS may be a better proxy for long-term welfare than static CS+PS Cons : -Violates usual definitions of welfare -Neglecting negative (short-term) impacts on firms may jeopardize acceptance -Is it really CS (at least in ex-ante assessment) or just price reduction times quantity (if its about CS, how is E(p) calculated?) Question: -Shall CS and PS really be estimated in CREW? -Or restrict attention to prices, productivity, quality…

2) Ex-ante vs. ex-post perspective Ex-ante: Which effects will the removal of the violation have? -Recommended thanks to its simplicity -Restricted to impact on consumers -Discussion: may be important if policymakers need to be convinced about action to be taken -However: -CREW is about the empirical assessment of measures % for cartel, but for abuse?!

Ex-post: Which effects did the removal of the violation have? -Seen as far more problematic for CREW due to data (before-after required, an 3 years may be too short) -Ex-post if far more ambitious both wrt scope (e.g. product selection) and methodology (e.g structural models; all in all closer to sector- analyses presented by Owen) -But: Is the simplicity really driven by ex-ante vs. ex-post or more owed to decisions on scope and methodology? -For instance, the impact of prices as estimated ex-ante can simple be observed ex-poast…

3) Going beyond single interventions: Deterrence effects of competition policy -done with surveys by the OFT -There are also a few econometric evidence on cartel prevention, in particular triggered by corporate leniency programs -Though interesting, this is not part of the CREW-project (?)

Mixed important aspects from discussion (I drop everything related to political economy-aspects and advocacy) Data and methodology: -Take data where you get it from and work with even poor data -Apply different methodologies and adjust it to data availability (incl. qualitative assessments) -BUT: -Before-after-comparison required -Difference-in-difference would be extremely valuable -Between countries-methodologies should be the same (?) -No oversimplified econometrics (Tansanie-study; GMM)

Factors to be taken into account: -Factors agreed upon: Quality, distribution… -Factors emphasized by many but difficult: -Employment -Poverty reduction