Abstract

Discussions of competition and regulatory reform typically focus on price and quantity effects. But improving certain infrastructure services can also stimulate entry, and competition in user industries downstream, allowing new firms to enter, incumbent users to offer new products, and rivalry to intensify. The authors present a case study of how innovations in road freight services affect selected downstream users of those services after regulatory reform. After a period of rigid regulation, and heavy government interference, Mexico in 1989 developed a new policy framework for road transport, with free entry, and market-based price setting. The result: faster, more reliable trucking has allowed user companies to offer new, previously unavailable products, and to reach new areas with existing products. Cheaper, more customer-responsive trucking services have allowed logistical innovations in user firms, and some user firms have decided not to keep their own fleets of trucks, but to outsource trucking services on the open market, thereby converting fixed costs to variable costs. For one fertilizer company, the benefits of reform included a ten percent improvement in operating margin. Successful reform requires careful planning and execution, and political support at high levels. Regulatory reform also profoundly changes the sectoral institution formerly responsible for the regulation. Enough resources should be provided to help organizations in the reformed industry make the transition to the post-reform environment - helping with such tasks as defining the organizations new role, and facilitating the redeployment of staff. The national competition agency can help greatly in laying the groundwork for reform by making a compelling case for the reforms expected benefits. After reform, the competition agency should also help with enforcement, to ensure that the cozy, cartel-like behavior stimulated by tight entry restrictions does not persist. In Mexico, three strong interventions were required to discipline attempted anti-competitive practices in the trucking industry in the years following reform. Document type: Book

Abstract

This paper studies the effects of differences in local administrative burdens in Italy in the years 2005–2007 preceding a major reform that sped up firm registration procedures. Combining regulatory data from a survey on Italian provinces before the reform (costs and time to start a business) with industry-level entry rates of limited liability firms, it explores the effects of regulatory barriers on the average of the annual entry rates across industries with different natural propensities to enter the market. The estimates of the cross-sectional analysis show that lengthier and, to some extent, more costly procedures reduced entry in sectors with naturally high entry. A one-day delay in registration procedures reduces the entry rate in highly dynamic sectors by more than 1 percent. These results hold when I include measures of local financial development and of efficiency of bankruptcy procedures are included. Document type: Book

Abstract

This Country Partnership Framework (CPF) presents the World Bank Group (WBG) program and the associated results framework for Lebanon for the period FY17-FY22. In a fragile and conflict-prone environment, this CPF aims at mitigating the immediate, and potentially long-lasting impact of the Syria crisis on Lebanon, while strengthening state institutions, addressing existing vulnerabilities, and bolstering efforts on longer term development challenges, all through interventions that foster inclusion and shared prosperity. The CPF will work through two focus areas as a way to renew the social contract between the state and the citizens: (i) expand access to and quality of service delivery; and (ii) expand economic opportunities and increase human capital. Through these two focus areas, the WBG will help Lebanon mitigate the economic and social impact of the Syria crisis, safeguard the country’s development gains, and enhance the prospects for stability and development in the coming years. The CPF will contribute to strengthening the relationship between the state and its citizens, a critical ingredient for peace and stability. The CPF will contribute to strengthening the relationship between the state and its citizens, a critical ingredient for peace and stability. The CPF benefited from a series of stakeholder consultations, including those held in connection with the Systematic Country Diagnostic (SCD) and the WBG Gender Strategy.