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.