All OECD countries rely fundamentally on competition in product markets to organise production. Competition stimulates innovation and efficiency in the use of resources, thereby leading to greater product diversification and lower prices. Therefore, competitive product markets are in the interest of all consumers.

Determinants of the strength of competition are specific to individual markets and there are no unambiguous indicators of its intensity. Nor is there a straightforward delimitation of competition policy. Rather, it spans a wide range of international, economy-wide and sector specific policies. These include competition law; regulatory policies; trade policy; state aid and public procurement.

The Economics Department provides analysis of product market competition in individual Member countries on a regular basis in the structural surveillance chapters of the Economic Surveys . Extending this work and building on previous work on regulatory reform and economic growth , the Economics Department has initiated a project on product market competition and economic performance.

The first stage consisted of developing a framework to identify potential problems with the state of competition and policy settings. The second stage, currently underway, involves country reviews on the basis of a special chapter in the country Economic Surveys. The final stage will draw lessons from the country reviews in a synthesis paper.