1. FRAMEWORK FOR COMPETITION REFORMS (FCR)
Rijit Sengupta
CREW NRG-II Meeting
2nd July 2014, New Delhi

2. OUTLINE Background (Competition Reforms) What is FCR?
Components of FCR
FCR & CREW Findings
(Photo: Neha Tomar)

3. Background
“If countries eliminated policies and practices that distort competition, they could grow rapidly”, Power of Productivity, William W Lewis (2004)
Many DCs/LDCs have adopted competition laws in last decade
However implementation remains limited
Policies affect competition, markets remain concentrated and anti-competitive practices prevail
Benefits of competition don’t accrue to consumers, producers
Low level of understanding and attention of key stakeholders
Benefits of introducing competition reforms needs to be demonstrated

4. Components of Competition Reforms
‘Competition Reforms’ encompass:
Enabling government policies
Well-designed regulatory framework, empowered institution
Functional competition regime (policy/law/agency)

5. Framework for Competition Reforms (FCR)
A guide to plan, execute, evaluate & rectify competition reforms in DCs
PLAN
EXECUTE
EVALUATE
RECTIFY
(Re: Shewart Cycle that is used in business management as a tool for continuous improvement of products/processes)

6. FCR (contd.) Developed for a specific market
To help key stakeholders appreciate benefits of competition reforms on consumers and/or producers
Lead to greater attention to the issue - as part of economic planning and reforms in DCs
Incorporate experience/research findings under CREW

7. FCR Preparatory Work Need a competition champion to lead
Formation of a small but decisive team (CRFT)
Identify need for competition reforms
Identify the sector/market to be reformed
Assess ‘state of the art’ (review of sector, concerns for consumers/producers)
(Photo: Shreya Kaushik)

8. Steps of FCR
Planning
Executing
Evaluating
Rectifying

9. FCR Step 1: Planning
Identify relevant reforms (policies, legislations, statues, programmes) in the selected market
Understand implications of these reforms on market composition
Highlight reform intentions (consumers and/or producers welfare)
Select indicators of consumer and producer welfare
Prepare a methodology and analytical plan (data collection and analysis)

10. FCR Step 2: Executing
From the set of selected reforms narrow down to those having pro-competitive or anti-competitive market outcomes
Gather relevant secondary literature/information and primary data on indicators of consumer & producer welfare
Interpret current levels of consumer and producer welfare resulting from these reforms (qualitative + quantitative)
Highlight prevailing concerns vis-à-vis selected reforms (qualitative + quantitative)

11. FCR Step 3: Evaluating
Link consumer and producer welfare or concerns with market composition resulting from reforms
Record suggestions from consumers, producers, key stakeholders for amendments
Identify political economy issues in sectors
Generate a body of evidence
Start engaging with CRFT members with results
Reform
Market Composition
Consumer/
Producer Impact

12. FCR Step 4: Rectifying
Review and discuss results (consumer & producer impacts)
Plan a process for initiating corrective measures
Develop a M&E framework to assess and report consumer and producer impacts after ‘corrective measures’ are taken

13. Developing FCR based on CREW findings
Development of outline of FCR
Draft sectoral FCR (based on CREW experience)
Incorporation of stakeholders’ views to make adjustments
Draft FCR (each sector) shared with NRG members in NRG-III and subsequent finalisation
Used to elicit interest among government/stakeholders for FCR in other sectors/countries

14. Thank You
(Photo: Rijit Sengupta)