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Pursuing Competition and Regulatory Reforms for Achieving Sustainable Development Goals

06 Sep 2016-pp 1-372
TL;DR: The final conference of the CREW project as mentioned in this paper focused on the relevance of competition reforms for social and economic welfare in developing countries, and motivated other countries, governments and development partners to accord greater attention to the subject of competition reform.
Abstract: This volume has been prepared under the auspices of the project entitled, ‘Competition Reforms in Key Markets for Enhancing Social & Economic Welfare in Developing Countries’ (CREW Project). This project was implemented by CUTS in four countries: Ghana, India, Philippines and Zambia, and across two common sectors: Staple Food and Bus Transport with the support from DFID (UK) and BMZ (Germany) facilitated by GIZ (Germany). The aim of the project was to highlight the relevance of competition reforms for social and economic welfare in developing countries, and motivate other countries, governments and development partners to accord greater attention to the subject of competition reforms. In view of this overall aim of the project, with inputs from the project advisers CUTS designed the final conference of the CREW project on a broader theme to talk about ‘Relevance of Competition & Regulatory Reforms in Pursuing Sustainable Development Goals (SDGs) in Developing Countries’. The theme was thought to be both contemporary and relevant in view of the adoption of the SDGs a couple of months before this final conference. In addition to the support it received from DFID (UK), BMZ (Germany) and GIZ (Germany), the conference also received support from the World Bank, G-77 Secretariat and the OECD. CUTS is grateful to all the above organisations for supporting the conference, and indeed also the production of this volume. We acknowledge the support from the members of the Project Advisory Committee of the CREW project, who contributed to make this conference a grand success. Special thanks to Clement Onyango and colleagues at CUTS Nairobi for their support and tireless efforts in the run-up and during the conference. We gratefully acknowledge the hard work and patience of all the paper authors for contributing extremely interesting individual chapters to this volume. We are also thankful to those friends of CUTS who reviewed the draft papers – Eleanor Fox, Tania Begazo/Martha Licetti (World Bank), Rafaelita Aldaba, R S Khemani, Frederic Jenny, Payal Malik, Allan Fels, David Ong’olo, Ashwini Swain, Peter Holmes and John Davies/Lynn Robertson (OECD). We are indebted to Mukhisa Kituyi, Secretary General, UNCTAD for writing an encouraging Foreword – and we hope to continue to receive his and UNCTAD’s support. We greatly appreciate the diligence of Madhuri Vasnani and Garima Shrivastava for editing and Mukesh Tyagi for preparing the layout of this report. Special thanks are due to Ashutosh Soni for his excellent coordination of communication with authors and reviewers of papers of this volume. We acknowledge the efforts of all the members of the CREW team, especially Cornelius Dube, Shreya Kaushik and Neha Tomar. Last but not the least, this report would not have seen the light of the day without the skillful direction, and overall guidance of Pradeep S Mehta, Secretary General, CUTS. He took special interest in this volume and went through each and every paper carefully himself. Words alone cannot convey our sincere gratitude to each and every individual who have contributed in every small way towards bringing out this volume. But it is only words that this world thrives on. We express our sincere gratefulness to all such individuals, without whom the publication of this volume would not have been possible.

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Pursuing Competition and Regulatory
Reforms for Achieving Sustainable
Development Goals

D-217, Bhaskar Marg, Bani Park
Jaipur 302016, India
Tel: +91.141.2282821, Fax: +91.141.2282485
Email: cuts@cuts.org, Web site: www.cuts-international.org
With the support of
© CUTS International, 2016
First published: July 2016
Citation: (2015), ‘Pursuing Competition and Regulatory Reforms for Achieving
Sustainable Development GoalsCUTS International, Jaipur
The material in this publication produced under the project entitled, ‘Competition
Reforms in Key Markets for Enhancing Economic and Social Welfare in Developing
Countries’ (CREW project) implemented by CUTS with the support of DFID (UK), and
BMZ (Germany) facilitated by GIZ (Germany), may be reproduced in whole or in part
and in any form for education or non-profit uses, without special permission from the
copyright holders, provided acknowledgment of the source is made.
CUTS would appreciate receiving a copy of any publication, which uses this publication
as a source. No use of this publication may be made for resale or other commercial
purposes without prior written permission of CUTS.
ISBN: 978-81-8257-244-7
Printed in India by Jaipur Printers Private Limited, Jaipur
#1617 Suggested Contribution: M450/US$50
Pursuing Competition and Regulatory Reforms for
Achieving Sustainable Development Goals
Published by

Contents
Acknowledgement i
Abbreviations iii
Contributors vii
Foreword xiii
Preface xv
An Overview ixx
Section I
Government Policy Promoting Competition, Innovation & Jobs
Role of Government in promoting sustainable economic growth through
competition reforms thereby creating employment and facilitating innovation
Part I: Theoretical Overview
1. Governance Mechanisms and Regulation:
Test of the Mediating Effects of Regulatory Decision Tools
in the Communications Regulator
Kuo-Tai Cheng 5
2. Role of Government, Sustainable Economic Growth and
Competition Reforms: An Indian Perspective
S Chakravarthy 33
3. Competition Advocacy as an Anti-Rent-Seeking Policy:
An Empirical Analysis
Tim Büthe & Rachel Glanz 51
Part II: Country Experiences
4. The Impact of Choice and Competition Reforms on
Secondary Schools in Nigeria
Afolayan Gbenga Emmanuel 75

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Abstract: Many if not most markets with network externalities are two-sided. To succeed, platforms in industries such as software, portals and media, payment systems and the Internet, must “get both sides of the market on board.” Accordingly, platforms devote much attention to their business model, that is, to how they court each side while making money overall. This paper builds a model of platform competition with two-sided markets. It unveils the determinants of price allocation and end-user surplus for different governance structures (profit-maximizing platforms and not-for-profit joint undertakings), and compares the outcomes with those under an integrated monopolist and a Ramsey planner. (JEL: L5, L82, L86, L96)

3,317 citations

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TL;DR: When markets have different types of users that attract one another, more demand from one group can spur additional demand from the matched group in a virtuous cycle as mentioned in this paper, and there is an opportunity for "platform envelopment" where one platform swallows a competitor.
Abstract: When markets have different types of users that attract one another, more demand from one group can spur additional demand from the matched group in a virtuous cycle. These effects are often present in platform markets. Examples include application developers/users, credit card merchants/cardholders, and dating sites for men/women. Network effects in these two-sided markets significantly affect prices, competition, and industry concentration. Prices generally fall for the group that is the stronger attractor. Winner-take-all markets can arise depending on the strength of these network effects, economies of supply, specialization, and multihoming. Finally, when users of one platform overlap users of another, there is an opportunity for "platform envelopment" where one platform swallows a competitor. Bundling features that attract one group of the competitor's users can bring along the matching group.

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TL;DR: Many of the blockbuster products and services that have redefined the global business landscape tie together two distinct groups of users in a network as discussed by the authors, and the distinct character of these two-sided network businesses demands a new approach to strategy.
Abstract: Many of the blockbuster products and services that have redefined the global business landscape tie together two distinct groups of users in a network. Credit cards link consumers and merchants; search engines connect Web users with advertisers. The distinct character of these two-sided network businesses demands a new approach to strategy.

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TL;DR: In this paper, the authors discuss network neutrality regulation of the Internet in the context of a two-sided market model and show that when access is monopolized, cross-group externalities (network effects) can give a rationale for network neutrality regulations.

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TL;DR: For example, the U.S. Department of Justice and the European Commission have investigated over forty international cartels for illegal price fixing in the United States and Europe, but prosecutions and civil litigation in those countries have been rare as discussed by the authors.
Abstract: During the 1990s, the U.S. Department of Justice and the European Commission prosecuted over forty international cartels for illegal price fixing in the United States and Europe. On the civil litigation front, almost all of the cases involving these cartels have been filed in the United States with its treble damages provisions. In many cases, these cartels sell to markets in developing countries, but prosecutions and civil litigation in those countries have been rare. Thus, in a sense, most antitrust litigation against such cartels has been attacking the symptoms of the problem rather than attacking this worldwide phenomenon across the international front where these companies work. Yet, if the international aspects of these cartels cannot be better addressed, we run the risk, as Justice Stewart explained, that “persons doing business both in this country and abroad might be tempted to enter into anticompetitive conspiracies affecting American consumers in the expectation that the illegal profits they could safely extort abroad would offset any liability to plaintiffs at home.”1

95 citations