New Publication Recognizes Global Efforts to Promote Competition in Emerging Markets

WASHINGTON, April 15, 2016—Competition—the process of rivalry between firms seeking to win customers’ business—is increasingly recognized as a critical driver of performance and innovation in national economies and therefore of economic growth and consumer welfare. This recognition has particularly gained ground in many developing countries where low economic growth is putting progress and shared prosperity at risk.

To boost competition among firms, governments implement laws and policies that allow firms to enter markets, grow and compete on a level playing field. Therefore, competition policy does not only imply enforcement of laws against anti-competitive practices, such as cartels, but also the proper design and implementation of government intervention in markets.

Competition authorities—the government bodies charged with promoting and enforcing competition in markets—play an active role in advocating for regulations in various industries that are conducive to competition, broader public policies that embed competition principles, rules for State-Owned Enterprises that guarantee their competitive neutrality, and mechanisms that ensure that state aid is available to all firms under equal terms.

Together, advocacy and enforcement can ensure that citizens benefit from vibrant, competitive and contestable domestic markets.

To recognize the work of competition authorities worldwide, the World Bank Group and International Competition Network have designed an annual Competition Advocacy Contest aimed at encouraging competition advocacy, sharing successes and their impact, as well as identifying tools and strategies that work in practice.

A new publication, Transforming Markets through Competition, launched on April 15^th, recognizes the 2015 winners and provides an assessment of new developments and recent trends in competition advocacy.

The publication highlights the tools competition authorities have developed to implement their work, as well as emerging trends in advocacy:

1. Authorities are more actively anticipating challenges and opportunities for competition such as the advent of technologies and other innovations that impact industries.

2. Advocacy is becoming more targeted, as authorities are beginning to engage more closely with sub-national entities like municipalities or local licensing agencies rather than operating only at the national level. This helps to ensure healthy competition dynamics at the local level.

3. Through advocacy, competition authorities play an essential role in developing and sharing market-specific knowledge and expertise across the entire government.

4. Advocacy-initiatives are having more and more concrete impacts in other areas of a country’s economy. For example, competition advocacy in Colombia allowed for one additional telecom operator and gave 22 percent more Colombians access to mobile internet.

The individual advocacy initiatives awarded as part of the Competition Advocacy Contest for 2015 exemplify successes that are having an impact on consumers and businesses:

• In Kenya, pro-actively preventing an association of healthcare providers from increasing charges saved consumers around $1.7 million a year.
• Prices for domestic flights came down by 70 percent in Indonesia following the removal of restrictive air fare regulation.
• Israel’s advocacy for changes in the immediate area of debit card payments will help reduce inefficiencies in the payment market estimated to be costing the economy US$100 million a year.

“We are proud to recognize the winners of the 2015 Competition Advocacy Contest,” said Martha Licetti, Lead Economist in the World Bank Group’s Trade & Competitiveness Global Practice, “and, through this new publication, to share their successes with other countries eager to promote competition that will ultimately benefit families and businesses.”

This year’s Advocacy book outlines key lessons learned in successful competition advocacy initiatives:

• How advocacy tools are used is more important than whether they are explicitly included in the legal framework.
• Changes to market and regulatory environments are happening ever faster, and so long-term engagements with regulators and industry are important.
• Across all experiences, measuring what advocacy strategies can achieve and have achieved makes efforts tangible and any mandate more credible.