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.

Chapter 10: Regulatory Impact Assessment: Improving Regulatory Quality in Developing Countries

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


INTRODUCTION The idea of using regulation to promote development in low income countries has a long and chequered history. Since regulation is used by governments to try and change people’s behaviour it is not surprising that it has been labelled good or bad according to whether the state or the market has been the politically preferred agent of economic management and development at any given time. The current position represents a retreat from the strong preference for the market demonstrated in the 1980s and 1990s. Although markets are still regarded as important agents of development it is now generally accepted that they can be imperfect, incomplete or missing. This then allows governments and other institutions a role in helping markets to function efficiently. Regulation is thus rehabilitated as an instrument for assisting private sector development and economic growth. Governments in most developing countries recognize the private sector as the most important contributor to economic growth and acknowledge the need for regulation to enable markets to function efficiently. But successful market development is not necessarily pro-poor. Therefore, regulation may also be needed to ensure that market-led development contributes to the objective of poverty reduction in low-income countries. Regulation can help ensure that markets are not only economically efficient but work so as to improve access by the poor. Also, the broader goals of sustainable development imply a much wider range of objectives for regulation policy including for example, protecting consumers, employees and vulnerable groups from abuse and protecting...

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