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Limited competition hinders the optimal use of telecommunication services in the Dominican Republic, which lags peer countries in mobile subscriptions and internet penetration. Despite recent reforms designed to enhance competition, the telecommunications sector remains dominated by a small number of companies. In addition, the antimonopoly policy is perceived to be weak compared to regional peers. High infrastructure costs limit the economic viability of replicating key facilities, creating bottlenecks. Fixed telecom prices have remained largely unresponsive to changes in demand over the last eight years. Moreover, prices for both mobile communications and fixed broadband are higher in the DR than in peer countries. Following the World Bank Group's Markets and Competition Policy Assessment Toolkit (MCPAT), this policy note provides a brief overview of key bottlenecks affecting the telecommunications sector, as well as key pro-competition reforms that could improve the regulatory landscape. Due to its inherent characteristics, the telecommunications markets, fixed, mobile and internet, in DR are concentrated. Currently, there are three main operators in the fixed, mobile and internet markets, with few smaller operators having a residual market share in the fixed and internet markets. While market concentration is common in the telecommunication sector in many countries, the interaction between market characteristics and the regulatory framework for telecommunications is key to yield efficient market outcomes in terms of prices, quality and access to services.

Competition Policy --- ICT Policy and Strategies --- Information and Communication Technologies --- Licensing --- Private Sector Development --- Tariffs --- Telecommunications

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This paper argues that relying on major policy distortions to create a domestic automotive industry through import substitution generates significant costs for the economy, in terms of foregone output, lower consumption, and reduced overall welfare. To bring this issue into sharp relief, the paper focuses on the extreme case of an outright vehicle import ban (complemented by an export subsidy), which gives rise to a misallocation of resources that will ultimately reduce the overall productivity of labor. More specifically, a share of the labor force is diverted to the production of previously-imported vehicles, which would have not happened in the absence of import restrictions. In particular, the output of the final good goes down; consumption is lowered; and overall welfare is reduced. Importantly, the equilibrium stock of vehicles available in this economy is also reduced, defeating the purpose of the imposition of import substitution. Additionally, the creation of an automotive sector is not neutral with respect to factor prices: the resulting lower wages imply that revenues in the newly-created sector are generated at the expense of labor income. Technological change in the automotive industry might act as a countervailing force for labor misallocation, albeit only partially.

Automotive Industry --- Competition Policy --- Import Substitution --- Industrialization --- International Economics and Trade --- Misallocation --- Trade Policy --- Welfare Impact

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In recent years, there have been major changes in the trade policy landscape in West Africa that will affect Senegal. The Common External Tariff (CET) for (ECOWAS) and European Union-Economic Partnership Agreement (EU-EPA) have generated an intense debate among policy makers, interest groups and the general population. The CET aims at the establishment of a customs union for ECOWAS countries through the adoption of a common external tariff and a common trade policy vis-A-vis third countries.' It was adopted at a Heads of State Summit in October 2013 in Dakar and is to be implemented from 2015. When initially designed in the mid-2000s, the CET was organized in four tariff bands: 0 percent for essential social goods, 5 percent for goods of primary necessity, raw materials and specific inputs, 10 percent for intermediate goods and 20 percent for final consumption goods. Since then, Nigeria has obtained the introduction of a fifth band at 35 percent for specific goods for economic development' (essentially agricultural goods and some consumer goods). The first section of the paper presents an analysis of the impact of the CET and EU-EPA on protection levels, trade flows and state revenues, changes in the price of the consumption bundles for households and impact on firm's profits. The second section underlines some key elements of an accompanying policy agenda and a third section concludes.

Access to Finance --- Competition --- Competitiveness and Competition Policy --- Export Competitiveness --- Private Sector Development --- Trade Policy

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Kenya's business environment has been weakening over recent years and this has limited the private sector's ability to grow, create jobs, and contribute to economic development. Competitive domestic markets are necessary to boost Kenya's competitiveness. There are two pillars that sustain effective competition policy: (i) opening markets and removing anticompetitive regulation; and (ii) effectively enforcing competition law. The main focus of this report is the identification of regulations that could restrict competition and distort markets and business decisions, having a negative effect on Kenya's competitiveness and growth. This report contains results from a review of the regulatory framework in key areas identified using Organisation for Economic Co-operation and Development's (OECD) Product Market Regulation (PMR) indicators, the World Bank Group's framework to identify anticompetitive regulations, and interviews with stakeholders. This report is concerned only with certain regulations that affect market competition in select sectors and topical areas. The report stems from the policy dialogue with various Kenyan institutions, supported by the Kenya Investment Climate Program. This report contains three parts. Part one identifies restrictive regulations that affect the whole economy, while Part two focuses on select sectors. Part three provides policy recommendations to promote greater competition in Kenyan markets through the assessment and modification of regulations that create obstacles to competition. It also provides estimates of the potential benefits of reforming product market regulations.

Agriculture --- Competitiveness and Competition Policy --- Electricity --- Insurance --- Private Sector Development --- Telecommunications

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Collusive agreements among competitors create unmitigated harm. When competitors agree to limit competition, id est to form economic cartels, the poor pay up to 50 percent more for essential goods, growth is stymied as competitiveness and productivity declines, and public policies become less effective. Such collusion undermines citizens' trust in market economies and in the role of the private sector as an engine of growth. And yet, cartels are common across many markets, mostly undetected and likely on the rise in the context of the COVID-19 pandemic. Cartels affect hundreds of markets from milk and poultry to oxygen and cement. Only a fraction of such secretive agreements is detected each year. In the aftermath of the COVID-19 crisis, the corporate sector is consolidating, and governments are intervening more in markets. Increasing corporate market power is associated with lower business dynamism.1 More concentrated and less dynamic markets create fertile ground for even more cartels. All the while, cartel detection has come to a virtual halt since the start of the COVID-19 pandemic. As part of the post-COVID recovery strategy, LAC countries can take concrete action to ensure that market economies yield benefits to all citizens, rather than to a few colluding firms. One pillar of the fragile social contract in many LAC countries is a market economy that delivers on its promise of affordable quality goods and services, opportunities for entrepreneurial efforts and productivity-based growth of income-levels. Cartels corrupt all three of these channels. Committing to preventing and deterring cartels is a concrete non-partisan agenda to set the social contract on a stronger footing.

Competition Policy --- Corporate Governance --- Corporate Law --- Law and Development --- Private Sector Development --- Private Sector Economics