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The general principle is that it is crucial for the government to provide a stable macroeconomic environment conducive to business development with a clear, transparent and neutral regulatory environment and neutral incentives to all firms and industries. Clear, transparent and neutral incentives (those which do not distinguish by sector or firm) are crucial so that entrepreneurial innovation is rewarded more highly than rent-seeking activities. The economy must provide its most talented members with the incentive to engage in entrepreneurial activities such as starting or expanding firms, developing new products and lowering costs. If the economy provides extensive subsidies or tax exemptions to industries or firms, or presents a difficult regulatory framework within which to do business, corruption will be encouraged and, crucially, talented people will find it more profitable to engage in the socially wasteful activity of lobbying the government for subsidies, protection, tax or regulatory relief. This socially wasteful lobbying is especially harmful because it attracts scarce entrepreneurial talent that would otherwise be devoted to helping the economy grow. First, there is the risk that the wrong industries will be identified. The market is a more reliable indicator of the industries that have comparative advantage than any economic model or theory. Over time this is particularly true, as comparative advantage changes with technological development. Moreover, targeting industries as "winners" will generate rent-seeking where industries will spend resources to obtain government subsidies rather than attempting to compete more effectively on the market. Governments often find it difficult to resist these pressures. And assistance that is designed to be temporary may become permanent. Thus, experience in most countries has shown that a government policy of attempting to "pick winners" is highly counter productive.

Competition Policy --- Competitiveness and Competition Policy --- Export Competitiveness --- Globalization --- Private Sector Development

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Even though many countries have opened to trade, markets in developing economies oftenunderperform due to anticompetitive behavior and restrictive regulatory frameworks by a fewdominant players. Effective competition policies offer a tool to complement and support governments' efforts to reduce barriers to trade. Active competition among market players has the potential to mitigate vested interests and facilitate the opening of markets to trade and investment. Greater competition within national markets reinforces international competitiveness of potential exporters through increased incentives to foster productivity, innovation and efficiency. Additionally, international trade reinforces competition in national markets by increasing contestability, entry and rivalry through increased presence of foreign products, services and investments. Empirical evidence suggests, for example, that: (i) the elimination of entry barriers, increased rivalry and leveling the playing field in upstream sectors contribute to export competitiveness in downstream manufacturing sectors; (ii) pro-competition market regulation that reduces restrictions and promotes competition is an important determinant for trade; (iii) competition law enforcement can be traced to export performance and is complementary to trade reforms; and (iv) industries with more intense domestic competition will export more.

Competition Policy --- International Trade and Trade Rules --- Private Sector Development

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In this paper, authors examine the political economy and consequences of industrial policy in the MENA region. How can the features of MENA's industrial policy be explained? And what accounts for the fact that, against world trends, industrial policies in MENA countries didn't followed the evolutionary path of industrial policies of other countries? Unlike in many other regions, industrial policy in MENA developed within the context of the region's strong 'social contract' between the government and its people. Although industrial development was an objective, it at times took a backseat to the more important goals of social transformation and economic redistribution, which influenced not only the types and success of industrial policies adopted, but also critically influenced the balance of power among interest groups. Section two of the paper provides the theoretical framework for understanding the experience with industrial policy. Starting with a brief survey of the arguments used to justify industrial policy interventions, and drawing on various strands of the literature it provides a review of the various mechanisms and arguments which help understand the factors which determine the emergence and type of industrial policies observed and how they change. Using this framework section three reviews the experience of MENA countries during the 1950s to the 1970s and the emergence of state-dominated vertical industrial policy, where traditional/sector selective and sector specific policies have been used extensively. Section four attempts to explain the failure for industrial policy to change during the 1980s and 1990s. While the developing world has moved toward more market oriented policies and production systems that are dominated by the private sector and rely on market signals, MENA has maintained much of the old style industrial policies and high state intervention in the economy that characterized much of the developing world in the past. The final section five makes concluding remarks on the likely directions of industrial policy in the region. As internal and external forces shape the way industrial policies can be used in the globalized economy, the MENA region's old style of industrial policy will need to adjust. The ultimate path of change will be determined greatly by each country's initial conditions and individual political economy factors.

Competition Policy --- Competitiveness and Competition Policy --- Economic theory & Research --- Export Competitiveness --- Governance --- Islamic Finance --- Macroeconomics and Economic Growth --- Political Economy --- Politics and Government --- Private Sector Development

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This report provides an assessment of the policies devoted to supporting small and medium enterprises (SMEs) in the Czech Republic. It presents an original analysis of all national-level SME-related policy instruments, totaling 93 instruments operational from 2013 to 2017 and disbursing 108.5 billion CZK (4.71 billion USD), using an analytical framework that compares the SME policy mix to the country needs (see Annex 1 for framework and methodology). The analysis integrates three interrelated segments: 1) A country needs assessment to determine the national needs for SME policies. The needs assessment included a macro-level analysis of the Czech Republic's performance in productivity and trade; an analysis of national- and firm-level innovation performance; a firm-level analysis of productivity across firm sizes, sectors, and regions (leveraging original data from the Czech statistics office); and an analysis of market and institutional conditions that influence resource allocation and firm productivity. 2) A policy mix analysis to determine if the Czech Republic's SME policy mix matches the needs identified in the country needs assessment. The policy mix analysis included a review of relevant SME policy stakeholders, institutions, and governance; a review of national-level strategies; identification of the characteristics of SME policies instruments (administering agency, mechanism of support, beneficiaries, etc).; and a cluster analysis to evaluate the internal consistency of the policy mix and identify overlaps. 3) Recommended areas for policy action were developed using the needs assessment and policy mix analysis to improve the effectiveness of the policy mix and the business environment.

Business Environment --- Competition Policy --- Competitiveness and Competition Policy --- Energy Efficiency --- Enterprise Development and Reform --- Innovation --- Investment Climate --- Private Sector Development --- Productivity --- Public Policy --- Small and Medium Size Enterprises

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Die ökonomische Analyse und die wettbewerbspolitische Beurteilung von Kooperation und Fusion werden kontrovers diskutiert. In dieser Diskussion stellt die EU Kommission mit dem „More Economic Approach“ hohe Anforderungen an eine differenzierte Wettbewerbsanalyse. Jedoch fehlen robuste ökonomische Modelle zur Analyse der Marktwirkungen vertikaler und horizontaler Kooperationskonstellationen im Vergleich zur Fusion. Am Beispiel der Konsumgüterindustrie vergleicht diese Arbeit die Marktwirkungen von Kooperations- und Fusionskonstellationen und vertritt dabei einen ökonomischen Untersuchungsansatz, der struktur- und verhaltensorientierte Kriterien abwägt. Vor dem Hintergrund der Modellergebnisse werden Entscheidungen der EU Kommission und der US Federal Trade Commission kritisch diskutiert. Dieses Buch wendet sich an Wirtschaftswissenschaftler und Juristen in privaten und öffentlichen Institutionen, die sich mit der Analyse und Bewertung der Wettbewerbswirkungen von Kooperation und Fusion beschäftigen, ebenso wie an Dozenten und Studierende der Wirtschaftswissenschaften mit den Schwerpunkten Industrieökonomik, Wettbewerbspolitik sowie Corporate Development.

competition policy. --- merger. --- economic policy. --- European Commission. --- United States. --- economic analysis. --- Industrial Organization.