Concurrence

Evaluation of Competition Interventions

 

Why is evaluation of competition interventions important?

 

Governments everywhere are increasingly interested in assessing the effects of their policies and the effectiveness of public institutions. Competition policy is no exception. Competition agencies affect the economy by taking decisions on cases under competition law. With their governments, they can influence market competition in the economy more widely through policy interventions.

For that, competition authorities should be able to:

  • step back and analyse the effects of their law enforcement activities on markets; and

  • understand how policy changes that intend to increase competition affect both the specific areas they are targetting and the economy as a whole.

Given its importance, “Evaluation of competition interventions” has become one of the strategic priorities for the OECD’s work on competition. The OECD is gathering evidence of existing best practices in such evaluations and trying to expand the range of techniques that can be used.

In 2013, the OECD published the results of a stocktaking exercise titled “Evaluation of competition enforcement and advocacy activities. The note discusses the outcome of a survey of 46 competition agencies that asked whether and how they assess the impact of their activities and what kind of information they provide to the government and the public on this impact.

Two other outcomes were issued in 2014: a Guide for helping competition authorities assess the expected impact of their activities, and a Factsheet on how competition policy affects macro-economic outcomes.

We are currently working on a Manual on ex-post evaluations of competition agencies enforcement decisions which is scheduled for release in 2015. 

    

 LATEST RELEASES

 

Factsheet on competition and macroeconomic outcomes

To help competition agencies advocate their work, this factsheet summarises evidence on the links between competition and macroeconomic outcomes, such as productivity, growth, innovation and employment.
Read more 

 

Guide on competition impact assessment

This guide provides a simple and easy methodology for determining the likely benefits that consumers will derive from competition agencies’ decisions and suggestions on how to present the results of the assessment to ensure that they are correctly interpreted. Read more

  

tables

  

Objectives and broad categories under study

The OECD is working on improving the methods to measure the effects of competition interventions under three broad categories:

  • Evaluation for accountability
  • Ex-post evaluation of specific interventions. 
  • Evaluation of broader impact on the economy

More information can be found below. We welcome ideas on  how to advance our understanding of these three areas and will be posting papers and other materials here as they are generated.  Other work relevant to this topic is also available below.

  

Evaluation for accountability

Competition authorities (like other public bodies) need to report their activities to Government, the public and other stakeholders typically through annual reporting.

Increasingly, such authorities are interested in finding measures of the outcomes they have achieved in the economy in addition to more traditional measures of activity. These measures of outcomes are highly valued by governments as they are typically simple measures of things that matter (such as benefits to customers).  However, if measures are too simple to reflect the complex economic reality, they could misrepresent the work of the competition authority, or even lead to biases towards those interventions that produce the largest measured effects at the expense of important but less tangible outcomes.

The OECD will be exploring this tension in its work to identify good practices in this area.

 

Ex-post evaluation of specific interventions

Competition authorities need to look back at cases where they took decisions to enforce competition law (or decided not to do so), to learn from the effects of such interventions.  Many competition authorities do this, and some have regular programmes by which the lessons learnt can feed back, to improve their practices. There is widespread agreement that authorities need to carry out such evaluation. 

The OECD’s work will therefore focus on identifying good existing practices, and exploring ways of extending the analytical framework, for example to consider the longer-term benefits of interventions and their effects on long-run market structure and performance.

 

Evaluation of broader impact on the economy

Ultimately, competition policy should be justified by its beneficial effects on the economy and well-being (for example, its effects on growth, innovation, or employment). 

These links are not always well understood.  There is strong evidence demonstrating that more competitive industries typically have higher rates of productivity growth, and that uncompetitive monopolies are slow to innovate.

Since the picture is a complex one, and there is relatively little analysis of the effects of competition policy specifically on these variables, the OECD is interested in identifying these links while drawing together and building upon the best existing analysis in this area.


If you have questions, comments or would like further information on the OECD work related to evaluation of competition interventions, please contact us at DAFCOMPContact@oecd.org.

    

Links and documents

OECD Competition Assessment Toolkit
‌Guidelines for Fighting Bid Rigging in Public Procurement

Best Practice Roundtables on Competition Policy

  

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