Features The CRED Website Website of the Competition Research For Economic Development Project. | (Read more...) Call for Proposals: Competition Research for Economic Development (CRED) 2009-07-28 Deadline: September 21, 2009 - CLOSED IDRC Pre-ICN Forum on Competition and Development: "Competition Principles under Threat" 2009-03 This Forum was held on June 2 2009 in Zurich, immediately prior to and in the same venue as the annual conference of the International Competition Network.  It addressed special policy measures ...

Project Number: 104241

Budget (IDRC contribution): CAD $417,500

Timeframe: December 2007 - December 2010

 

 

A crucial element in the introduction of the market system is a competition regime to promote rivalry among private sector enterprises.  Middle and low-income developing and transition countries are still actively developing market disciplines of this kind.  More empirical evidence is urgently needed on the potential gains for development from reducing the productive inefficiencies, extraction of rent and impediments to innovation that the literature suggests can be attributed to non-competitive market structures and firms’ anticompetitive conduct and checked by enforcement of competition law. But this is a chicken and egg situation. The gains can only be demonstrated if a sound competition law and an effective enforcement agency are in place to monitor and correct market structures and firm conduct and let the benefits of inter firm rivalry be realized. Moreover, if monopolies and dominant firms are entrenched by the time the Competition Authority starts work, the operational challenge in implementing competition law is enormous. The situation is exacerbated if there are close relations between the private sector and the government.  By the same token, the need for corrective action is all the greater in such situations.  

 

Competition Authorities in developing countries need all the skills, allies and resources that they can muster. External technical assistance in this area, from aid donors, multilateral agencies or long established competition agencies in other countries, is concentrated on training staff in case handling methods. This project fills an important niche by funding research by, and supporting research capacity building within, developing country Competition Authorities.

 

The project enables developing country Competition Authorities to generate robust research-based evidence on the costs to the economy, in terms of efficiencies and consumer welfare foregone, of the existence of non-competitive market structures, exploitative conduct by private enterprises and poorly designed regulatory provisions. It provides them with resources and specialist advice to carry out market studies, focussing on sectors where enforcement would yield immediate consumer welfare gains and on identifying regulatory obstacles to competition that could be removed by simple changes to the statute book. Recommendations for remedies will emerge which the Authorities themselves may have the powers to enforce; if not, they are in a strong position to press the need for changes on the relevant government departments.  

 

Grants of approximately $45,000 CAD are given for research studies of 6 months duration to proposals selected from submissions to an open Call for Proposals, following the recommendations of an  expert international Advisory Group.  The research may be done by Competition Authorities on their own or in collaboration with a local university or research institution. Dissemination activities have also to be carried out. Low-income country competition authorities are eligible for more in-depth technical support. Involvement in multi-institutional research teams and dissemination work assists the Authorities forge alliances, which are essential to the political sustainability of their mission.  

 

The project was conceived inside IDRC and is administered by the Centre.   Apart from managing the competitive grants process, IDRC will synthesize the country research results for international audiences, implement a high profile communications program and provide an information sharing platform for the participating researchers.  It will also be alert and as far as possible responsive to expressions of need from Competition Authorities for other types of research capacity building support. 

The project builds on the success of a pilot project entitled "Competition Issues in the Distribution Sector" (file no. 103430).  External funds are sought to augment the project budget and allow the activity to attain its full potential.  

 

 

The expected outputs of the project include:

 

 

The success of the pilot phase suggests that the project could have disproportionately large outcomes. Receipt of the awards and carrying out of the research will enhance the political standing of Competition Authorities, consequent on improvements in their research capacity and demonstrated ability to examine competition problems.  New research-based analysis and evidence will stimulate improvements in enforcement of competition law and changes in government statutes enabling the more consistent application of competition principles across different markets.  The project will help towards greater understanding of competition issues among stakeholders in developing countries, greater public acceptance of the benefits of a culture of competition and movement towards new competition compliance norms by actors in the private sector. There will be better understanding of the need for addressing competition issues at different levels of intervention and in some instances the project findings may lead to the adoption of new competition policy measures and interpretive guidelines.

 

 

This project is squarely addressed to the markets, other institutions and inclusive growth research area of the GGP program. Because competition policy is a framework condition for growth and consumer welfare, the project is also relevant to the patterns and drivers of inclusive growth research area.   

 

 

For additional information on this project, please visit the CRED website (http://www.idrc.ca/cred) or contact Susan Joekes, the IDRC officer responsible for this project, at the contact details given below.