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Broad Competition Policies for Least Developed Countries
 

Background

When discussing Competition Policy, there is often a (natural) tendency to focus on the issues of legislation and enforcement institutions, so-called 'narrow' competition. It is important to appreciate, however, competition policy in the broader sense that may be described as: all policies relevant to competition in the market, i.e. trade policy, regulatory policy and government policies aimed at addressing anti-competitive policies of enterprises, public or private.

Of 192 Member States of the United Nations, 122 have enacted some form of Competition Act, regulating anti-competitive business practices, while 118 Member States have established some form of Competition Authority. This implies that around 40 per cent of Member States have neither a competition law nor authority and do not practice competition policy in the narrow sense. In many cases, the absense of narrow policies may be due to considerations of limited professional and economic resources, lack of political will or a suitably supportive environment.

Nevertheless, competition policy remains very important for developing countries, because it can: (a) play a vital role in assisting to strengthen market-supporting institutions and implementing inclusive development strategies; (b) ensure that free markets provide opportunities that both businesses and the poor can to benefit from and (c) play a key role in any market-oriented economic reform and pro-poor development strategy. Further, broad competition policy can ultimately feed into narrow competition policy; providing a foundation for the enactment of legislation and the implementation of enforcement regimes.

Objectives

The objective of this project is to investigate the benefits of implementing a broad competition policy framework for least developed countries. The project will focus on a number of key areas for analysis of the broad competition policy framework in least developed countries, inter alia: public procurement systems, industrial (agricultural) policies, sectoral regulation, corporatization of SOEs and the effects of broad competition policy on governance. The project will undertake both practical and theoretical approaches. Concerning the former, in each relevant chosen area a survey will be carried out of the International and regional frameworks of rules and guidelines. Questionnaires will then be used to demonstrate how closely the national rules, guidelines and practices of the selected Member States follow these 'standards'. In conjunction with these surveys, theoretical studies, particularly in the field of political economy, will be used to elucidate factors that may inhibit, and benefits derived from, the implementation of broad competition policies. By using a dual approach, and by highlighting relevant case studies and best practices, it is expected that sound policy recommendations will be forthcoming from this work, so that least developed countries may actively pursue competition policies and implement related principles.

Project Plan

Phase 1:  Identification of Member States without 'narrow' competition policies; grouping of these Member States (small economies, island nations, HIPC etc.) and identification of areas of broad policies relevant to these States.

Phase 2:  Identification of associated international frameworks of rules and guidelines.

Phase 3:  Survey of identified Member States, outlining practices and case studies.

Phase 4:  Theoretical work underpinning issues relevant to and identified by surveys.

Phase 5:  Formulation of policy recommendations and publication of best practices and 'road map'.

Current Phase of Implementation

The project is currently in Phase 1.

Contact Information

Dr. Graham Mott
Economic Affairs Officer
Competition and Consumer Policies Branch (CCPB)
UNCTAD
E-mail: Graham.Mott@unctad.org
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