Investment Climate Reform Competition Policy And Economic Development

A survey of countries reveals that most have sought seriously to improve their investment climates through changes in their business regulatory laws, including competition policy, and administration. The survey also found that there is broad agreement that competition policy is important for economic development yet very few countries indeed have attempted to quantify the impact of competition policy. A diminishing, but still significant, number of developing countries do not have a competition law.

This paper analyzes the administrative, political and technical challenges involved in passing and implementing investment climate reforms in developing countries. Drawing on more than 25 case studies, the authors emphasize the role of international bench-marking in triggering reform, the importance of pilot projects for policy learning and experimentation and the need to treat implementation and monitoring as an integral part of the reform process and not merely as an afterthought

Private firms are at the forefront of the development process, providing more than 90 percent of jobs, supplying goods and services, and representing a significant source of tax revenues. Their ability to grow, create jobs, and reduce poverty depends critically on a well-functioning investment climate--defined as the policy, legal, and institutional arrangements underpinning the functioning of markets and the level of transaction costs and risks associated with starting, operating, and closing a business. The World Bank Group has provided extensive support to investment climate reforms. This evaluation by the Independent Evaluation Group (IEG) assesses the relevance, effectiveness, and social value of World Bank Group support to investment climate reforms as it relates to concerns for inclusion and shared prosperity. IEG finds that the World Bank Group has supported a comprehensive menu of investment climate reforms and has improved investment climate in countries, as measured by number of laws enacted, streamlining of processes and time, or simple cost savings for private firms. However, the impact on investment, jobs, business formation, and growth is not straightforward. Regulatory reforms need to be designed and implemented with both economic and social costs and benefits in mind; IEG found that, in practice, World Bank Group support focuses predominantly on reducing costs to businesses. In supporting investment climate reforms, the World Bank and the International Finance Corporation use two distinct but complementary business models. Despite the fact that investment climate is the most integrated business unit in the World Bank Group, coordination is mostly informal, relying mainly on personal contacts. IEG recommends that the World Bank Group expand its range of diagnostic tools and integrate them in the areas of the business environment not yet covered by existing tools; develop an approach to identify the social effects of regulatory reforms on all groups expected to be affected by them beyond the business community; and exploit synergies by ensuring that World Bank and IFC staff improve their understanding of each other's work and business models.

Regulatory reform and competition policy are two important and inter-related areas of regulatory policy and public administration. Both can play a key role in improving the quality of regulation, and creating healthy and competitive markets and an attractive investment climate. This in turn leads to greater economic growth, employment and incomes. Part one of this paper discusses definitions and key issues associated with regulation, regulatory quality, and competition policy. This discussion focuses on competition policy as it relates to restrictions on competition and also pro-competitive regulation, which involves protecting consumers through economic regulation. Part two of this paper considers institutions and processes for implementing regulatory quality and competition policy agendas, including regulatory agencies, regulatory reform bodies, competition authorities and broader regulation-making processes. Part three notes the importance of assessing competition policy issues on a case-by-case basis and identifies the main objectives and features of competition policy. This includes a discussion about when competition policy issues are likely to play an important role in regulatory assessment and reform. Part four considers mechanisms for coordinating- where appropriate-competition policy and regulatory quality assessments, including undertaking competition assessments and providing advice to decision makers.

An OECD assessment of Egypt's business climate.

Most people agree that a good investment climate is essential for growth and poverty reduction. Less clear is how to achieve it. Many reforms are complex, involving more than technical design and content. They are both political, facing opposition from organized and powerful groups - and institutionally demanding, cutting across different departments and levels of government. Reform thus requires paying as much attention to understanding the politics and institutional dimensions as to policy substance, which is the goal of this paper. Drawing from more than 25 case studies, it shows that there is no single recipe or manual for reform, given diverse contexts and serendipity in any reform effort. But three broad lessons emerge. The first is to recognize and seize opportunities for reform. Crisis and new governments are important catalysts, but so is the competition generated by trade integration and new benchmarking information. The second is to invest early in the politics of reform. Central to this process is using education and persuasion strategies to gain wider acceptance and neutralize opponents. Pilot programs can be valuable for demonstrating the benefits and feasibility of change. And the third is to pay greater attention to implementation and monitoring. This does not require full scale public management reforms. Reformers can draw on private sector change management techniques to revitalize public institutions responsible for implementation. Given the cross-cutting nature of reform, new oversight mechanisms may be needed to monitor and sustain reform. The paper concludes with an emerging checklist for reformers and identifies areas for future work.

Drawing on good practices from OECD and non-OECD countries, the Framework proposes a set of questions for governments to consider in ten policy fields as critically important for the quality of a country’s environment for investment.

This is the 27th edition of the annual World Development Report and this edition focuses on a key development challenge of how governments can promote a strong investment climate in their societies, in order to foster economic growth and address poverty reduction objectives. Drawing on surveys of nearly 30,000 firms in 53 developing countries, as well as country case studies and other new research, the report explores options for expanding opportunities for firms and entrepreneurs of all types, from farmers and microenterprises to local manufacturing concerns and multinationals, to invest productively and create job opportunities. Findings drawn include that a strong investment climate should benefit society as a whole as well as individual firms, requires well-designed regulation and taxation systems. and should recognise and embrace the contributions of all types of firms to growth and poverty reduction. Governments need to address barriers to competitiveness and bridge the gap between policies and their implementation and address deeper sources of policy failure which can undermine a sound investment climate. The report also contains selected data from the World Bank's programme of Investment Climate Surveys and the Doing Business Project, as well as from the World Development Indicators 2004.

This review assesses the overall investment climate in the Philippines, looking at investment policy, investment promotion and facilitation, competition policy, infrastructure investment and responsible business conduct.

Competition, competitiveness, innovation and growth are inherently linked. This book covers the main ideas underlying competitiveness and its applications, drawing lessons for developing economies and relevant policy recommendations.