Selection of CREW Countries & Sectors

1. Partners’ Meeting Selection of CREW Countries & Sectors Pooja Pokhrel Nathan India (Pvt.) Ltd. 15 March 2013, Jaipur

2. CREW Country Selection Conditions • 2 countries from Africa and 2 from Asia • At least one SADC country • At least one ASEAN member state • At least two DFID priority countries • History of CUTS engagement in each country • Only Anglophone countries in Africa

3. Empirical Evidence • Very few studies deal with what contributes to the highest impact of reform • Kronthaler (2010) studies what contributes to effectiveness of competition reform • Level of economic development, Control of Corruption, and the time a competition law exists matter

4. Data seems to confirm…

5. Data seems to confirm… (Contd.)

6. Country Selection Approach • Start with 99 countries in Asia and Africa • Employ a 3-step screen: • Step 1: Income considerations • Step 2: Considerations of effectiveness in existing policies • Step 3: CREW implementation considerations

7. Step 1: Income Considerations • Focus on developing countries (only LI & LMI) • Immediately eliminates 32 countries, including Brunei and Singapore in ASEAN • Screen out countries with per capita income of less than $600 • Proxy for level of economic development • 44 countries remaining

8. Step 2: Effectiveness of Policies • Avg. WEF index “Effectiveness of anti-monopoly policies” for past 2 years<= 3.5 • Variable of interest • 33 countries remaining • Avg. WGI “Regulatory Quality Index” for past 5 years<= -1.0 • Competition policy embedded with regulatory environment • 19 countries remaining • Avg. WGI “Control of Corruption Index” for past 5 years <= -1.0 • Consistent with Kronthaler & data correlation • 16 countries remaining

9. Step 3: Implementation Considerations • Countries with CUTS experience • Only Anglophonic countries • Arrive at a list shortlist of 8 countries, of which 2 (Nigeria & Ghana) do not have a competition law in place • Final shortlist of 7 countries • Africa: Ghana, Zambia • Asia: India, Indonesia, Philippines, Sri Lanka, Vietnam

10. Sector Selection Approach • Based on sector characteristics • Existence of sector policies and other signs of sectoral reform • Nature of market • Impact on the poor • Data Availability • Assign scores to make objective cross-country comparisons

11. Sector policies & reform • Score ranging from 0 to 4. • 0: No sector regulation or policy • 1: Sector policy but no sector regulation • 2: Sector policy and/or sector regulatory law • 3: Also a sector regulator • 4: Additional signs of reform.

12. Nature of Market • Review number of market players, market shares, influence of SOEs • Score ranges from 1 to 3 • 1: Primarily a monopoly or if there are no organized market players • 2: Has one or a few large players with some other smaller participants • 3: Seems to have multiple market players and competition.

13. Data Availability • Reviewed based on proposed CREW methodology • Assign score ranging from 1 to 3 • 1: Aggregate-level data available • 2: Micro-level household and/or firm data available • 3: Relevant data, particularly at the micro-level available, both before and after reform.

14. Impact on the poor • Review focused on current reach of the sector to the poor, proportion of the poor’s expenditure on sector • Assign score between 1 and 2 • 1: Relatively less impact • 2: Relatively high impact

15. Sector Selection • Reviewed 6 sectors • Domestic Fuel • Electricity • Passenger Transport • Pharmaceuticals • Staple Food • Telecommunications • For 7 shortlisted countries • Only sectors, not product markets

16. Country/Sector Scorecard

17. Proposed Countries & Sectors • Sectors • Passenger Transport, Staple Food • Countries • Ghana, India, Philippines, and Zambia

18. Thank you!