Regulatory reform competition and innovation a case study of the mexican road freight industry


== 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: Preprint

== Full document ==
<pdf>Media:Dutz_et_al_1999a-beopen613-9853-document.pdf</pdf>


== Original document ==

The different versions of the original document can be found in:

* [http://dx.doi.org/10.1596/1813-9450-2318 http://dx.doi.org/10.1596/1813-9450-2318]

* [http://hdl.handle.net/10986/22187 http://hdl.handle.net/10986/22187] under the license http://creativecommons.org/licenses/by/3.0/igo/

* [http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2000/05/25/000094946_00050505302442/Rendered/PDF/multi_page.pdf http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2000/05/25/000094946_00050505302442/Rendered/PDF/multi_page.pdf]

* [https://openknowledge.worldbank.org/bitstream/10986/22187/2/WPS2318.pdf https://openknowledge.worldbank.org/bitstream/10986/22187/2/WPS2318.pdf] under the license cc-by

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: [http://regulationbodyofknowledge.org/wp-content/uploads/2013/03/Dutz_Regulatory_Reform_Competition.pdf http://regulationbodyofknowledge.org/wp-content/uploads/2013/03/Dutz_Regulatory_Reform_Competition.pdf],
: [http://documents.worldbank.org/curated/en/249441468777296285/Regulatory-reform-competition-and-innovation-a-case-study-of-the-Mexican-road-freight-industry http://documents.worldbank.org/curated/en/249441468777296285/Regulatory-reform-competition-and-innovation-a-case-study-of-the-Mexican-road-freight-industry],
: [https://ideas.repec.org/p/wbk/wbrwps/2318.html https://ideas.repec.org/p/wbk/wbrwps/2318.html],
: [https://openknowledge.worldbank.org/handle/10986/22187?show=full https://openknowledge.worldbank.org/handle/10986/22187?show=full],
: [https://papers.ssrn.com/sol3/Delivery.cfm/1073.pdf?abstractid=630691&mirid=1 https://papers.ssrn.com/sol3/Delivery.cfm/1073.pdf?abstractid=630691&mirid=1],
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