Competition policy and development

This policy brief describes the role of competition policy, and uses Asian experiences to highlight some aspects of its design, implementation, and place in the broader policy pattern.

Observations of the brief include:

• effective competition policy depends on active and fair enforcement; therefore clear property rights and a sound legal system are prerequisites
• for countries in transition or at early stages of market development, first-generation reforms that lay the basis for macroeconomic stability and development of institutional infrastructure must be top priority
• nevertheless even late reformers such as Viet Nam, which still face challenges from the first round of reforms, are already acting to ensure that restraints to competition will not hinder future development
• considering competition policy issues at an early stage helps to ensure that they mesh well with other policies
• for countries with more developed market systems and macroeconomic policy framework, the challenge in second-generation reforms is to promote a competition culture in the general population, and to ensure the relative independence of a competition agency with adequate resources and a clear mandate
• cooperation between competition agencies in different countries is becoming increasingly important in the globalisation process, and can be an important source of knowledge exchange and skills development
• in implementing competition policy, developing countries in the Asian and Pacific region should draw on lessons from the experience of Japan and Korea, should start early, and take a long-term view
• while many countries are moving to implement or strengthen their competition policies, it is notable that none appear to be moving toward repealing them.

[adapted from author]