Regulation, Markets and Poverty

Regulation, Markets and Poverty

The CRC Series on Competition, Regulation and Development

Edited by Paul Cook and Sarah Mosedale

Regulation, Markets and Poverty incorporates the main policy implications arising from theoretical and empirical research into competition, regulation and regulatory governance in developing countries. This analysis often challenges conventional wisdom and draws on the work of leading experts from a range of disciplines.

Introduction

Edited by Paul Cook and Sarah Mosedale

Subjects: development studies, development economics, economics and finance, competition policy, development economics, politics and public policy, public policy, regulation and governance

Extract

For more than 25 years, developing countries in Africa, Asia and Latin America have been pursuing, in various ways and with varying degrees of intensity, economic liberalization. For many of them this took place under externally driven programmes of structural adjustment, in which the World Bank and the International Monetary Fund (IMF) directed governments in implementing fiscal and exchange rate reform, trade liberalization, domestic market liberalization and privatization. Countries undergoing structural adjustment did not initially recognize how important regulation is for economic liberalization. Indeed, regulatory and competition policy was conspicuously absent from the policies prescribed by the World Bank and the IMF. Initially, privatization was often pursued without much thought to the regulatory framework that would be needed, even where state-owned monopoly utilities had been converted to private sector monopolies (Cook et al., 2004a). There were only a handful of developing countries that had competition agencies, even in the limited anti-trust sense, by the end of the 1980s (Gray and Davies, 1993). With the spread of economic liberalization across the world and the underlying structural changes that were taking place within economies, it became increasingly obvious that attention needed to be paid to regulation and competition. Without regulation the potential advantages of liberalizing markets were in danger of being diminished, both in terms of improved efficiency and welfare. Even in developed countries that had embarked on various market-oriented reforms within government, and had privatized utilities and outsourced numerous public services, it became evident that there was a lack of...