Product Market Competition and Economic Performance in the United Kingdom

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Product Market Competition and Economic Performance in the United Kingdom

Author Info

Maria Maher
Michael Wise ()

Abstract

This paper assesses what role product market competition and regulatory reforms may have played in the performance of the British economy over the past decade. Competitive pressures appear to be relatively strong in the United Kingdom, with regulations inhibiting competition and barriers to trade amongst the lowest in the OECD. Nevertheless, there is scope for improvement and the recent overhaul of competition legislation should help to further promote competition. Much progress has been made in the professional services sector. Self-regulatory bodies are no longer exempt from competition legislation and professional bodies have undertaken a number of actions towards removing or easing restrictions that inhibit competition. In the retail sector, market power remains a problem and the competition authorities will need to remain vigilant. The government’s recent approach to planning has made new large scale entry very difficult, impeding competition and inhibiting entry. Industry regulators also need to remain vigilant in the electricity, gas and telecommunications sectors. Reforms in these sectors have led to increased productivity, though international comparisons suggest that there is scope for prices to fall. While recent steps by the government overcome the most serious weaknesses of the privatised rail system, continuing problems regarding incentives and responsibilities remain to be resolved.

Concurrence sur les marchés de produits et performance économique au Royaume-Uni
L'objet du présent document est d'évaluer le rôle que la concurrence sur les marchés de produits et les réformes de la réglementation ont pu jouer dans les performances de l'économie britannique au cours des dix dernières années. Les pressions concurrentielles semblent relativement fortes au Royaume-Uni, où les réglementations entravant la concurrence et les obstacles aux échanges figurent parmi les plus modestes de la zone OCDE. Il existe néanmoins des marges de progression, et la récente refonte du droit de la concurrence devrait contribuer à promouvoir davantage celle-ci. Des avancées considérables ont été accomplies dans le secteur des services professionnels. Les organismes d'autoréglementation ne sont plus exclus du champ d'application du droit de la concurrence, et des organismes professionnels ont pris un certain nombre de mesures en vue de lever ou d'assouplir les restrictions à la concurrence. Dans le secteur de la distribution, la question du pouvoir de marché reste problématique et les autorités de la concurrence devront rester sur le qui-vive. L'approche adoptée récemment par le gouvernement en matière d'urbanisme a rendu très difficile l'installation de nouvelles grandes surfaces, ce qui entrave la concurrence et l'entrée de nouveaux acteurs sur le marché. Les autorités de régulation compétentes doivent également demeurer vigilantes dans les secteurs de l'électricité, du gaz et des télécommunications. Les réformes menées dans ces branches d'activité ont débouché sur des gains de productivité, mais des comparaisons internationales laissent à penser que les prix peuvent encore baisser. Si les récentes initiatives des pouvoirs publics ont permis de remédier aux défaillances les plus graves du système privatisé de transport ferroviaire, les problèmes persistants relatifs aux incitations et au partage des compétences doivent encore être résolus.

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Paper provided by OECD Economics Department in its series OECD Economics Department Working Papers with number 433.

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Date of creation: 09 Jul 2005
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Handle: RePEc:oec:ecoaaa:433-en

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Find related papers by JEL classification:
K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
O51 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada

This paper has been announced in the following NEP Reports:

NEP-ALL-2005-10-15 (All new papers)
NEP-COM-2005-10-15 (Industrial Competition)
NEP-EEC-2005-10-15 (European Economics)
NEP-ENE-2005-10-15 (Energy Economics)

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