consequences competition and regulation in services Kozluk IMF-OECD-WB Product Market Competition Regulation Inclusive Growth June 2018

1. Discussion:
Session II: The
consequences of
competition and regulation
in services
Tomasz Kozluk, OECD Economics Department
11/06/2018

2. 0
10
20
30
40
50
All GfG
countries
(GfG 2017)
Advanced
(GfG 2017)
Emerging
(GfG 2017)
OECD
countries (GfG
2005)
Countries with no priority in this area
With a priority on services regulation (incl. network sectors & retail and more
general barriers to trade and FDI)
OECD: services (de)regulation among top 5
pro-growth reform priorities
Source: OECD Reform Tracker, forthcoming. 2

3. • Sample representativeness? ESP: given size of sample and
subsamples, EU: across countries,
• Time horizon: when would we really expect the benefits from
reform to materialise? ESP: immediately, EU: in 2 years?
• Non-linearities? ESP: firm size, EU: enforcement/foreign/dtf.
• ESP: service intensive industries – result or assumption? EU:
Foreign firms suffer from conduct more, but not from entry?
• Exogeneity of reforms? ESP: “services reforms are treated as
exogenous and brought forward from EU wide directives and
initiatives”, EU: doesn’t seem too concerned.
• Fixed I/O tables: what if: services liberalisation -> lower prices ->
input substitution? Would this imply effects are underestimated?
• Independent variables: trending variables can cause problems
for identification (particularly in ESP, but also in EU)
Questions and thoughts on approaches: (ESP)
Correa-Lopez et al., (EU) van der Marel et al.
3

4. Taking the results at face value:
• How important is EU
harmonisation/single market for services?
• Is what you find “low hanging fruit”? Has
it been picked already?
• What about “new” service markets?
Digital/data, etc.?
• Limits of measurement?
More general questions and thoughts
4

5. Services deregulation – the limits of
liberalisation or of existing indicators?
0.00
1.00
2.00
3.00
4.00
5.00
6.00
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
United Kingdom
Austria
Belgium
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Luxembourg
Netherlands
Poland
Portugal
Slovak Republic
Slovenia
Spain
Sweden
OECD ETCR: Entry Regulation in Network Sectors
Van der
Marel et al.
Correa-Lopez et al.
5

6. 0.00
1.00
2.00
3.00
4.00
5.00
6.00
1998 2003 2008 2013
EU max
EU average
ESP
EU min
Services deregulation – the limits of
liberalisation or of existing indicators?
OECD NMR: Conduct Regulation in Professional Services (A,A,E,L)
Van der Marel et al.Correa-Lopez et al.
6

7. 0.00
1.00
2.00
3.00
4.00
5.00
6.00
1998 2003 2008 2013
EU max
EU average
ESP
EU min
Services deregulation – the limits of
liberalisation or of existing indicators?
OECD NMR: Entry Regulation in Professional Services (A,A,E,L)
Van der Marel et al.Correa-Lopez et al.
7

8. • OECD’s Programme for Effective
Market Regulation – to respond to
new challenges in (measuring)
regulations
• Reform tracking (IMF, OECD):
– Better evidence (e.g. what is best
practice)
– Narrative approaches
– Quasi-natural experiments
– Case studies
Better design and measure regulations and
understand their effects?
8