- The CRC Series on Competition, Regulation and Development
Edited by Paul Cook and Sarah Mosedale
Chapter 14: Competition and Regulation: The Connection with Poverty and Income Distribution
INTRODUCTION In this ﬁnal chapter we focus on the relationship between regulation, competition and poverty reduction as identiﬁed and examined in our research. Halving absolute poverty by 2015 is the ﬁrst Millennium Development Goal (UN, 2000). How can regulators contribute to achieving this? Helping to create the conditions for economic growth, though important, is not enough – there is no guarantee that wealth will ‘trickle down’ to the poorest. Pro-poor regulation involves much more than a preoccupation with correcting market failure. Wider issues such as managing a risk society and social justice need to be seen as equally important goals of regulation. Opinion is divided and so is evidence (or at least diﬀerently interpreted) as to how growth and poverty – as represented by inequality of income distribution – are related (Cook and Uchida, 2005). For example, does one have to come ﬁrst and does it preclude the other? Speciﬁcally, it used to be believed that in poorer countries, in the early stages of increased economic growth, inequalities in income would inevitably increase as some people were able to take advantage of new opportunities, while others were excluded from the potential beneﬁts (Kuznets, 1955). Some people argued that, if growth suﬃciently increased average income, this could somehow oﬀset such inequalities. But more recent evidence has not supported the idea (comfortable for economic and political elites of course) that for overall gain, it is the poor who must feel the pain (Dollar and Kraay, 2002). Recent research in...
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