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Troubled Times: What Role for Competition and Regulatory Policy?

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  • Gorecki, Paul K.

Abstract

Hard times, occasioned by a prolonged recession resulting in a series of austerity budgetary measures, generate much economic insecurity. How should the State respond? One clear choice is between robustly enforcing competition and regulatory policy and relaxing these policies. What does the international as well as Irish evidence suggest is the result of such relaxation? Could relaxation of competition and regulatory policy provide greater economic security than robust enforcing? If so, at what price? Are there any conditions under which groups or sectors should be sheltered from market forces to provide greater economic security without losing the overall benefits associated with good principles of competition and regulatory policy? Drawing on international evidence this paper addresses these questions. It finds that choosing to relax competition and regulatory policy may deliver transitory benefits but that it is ultimately likely to be an economically costly policy. Even without relaxation, competition and regulatory policy contain provisions that permit otherwise restrictive agreements and regulations to be allowed, but only when the benefits exceed the costs. These well established precedents are contained in Irish competition law. However, the regulatory process in Ireland has, as yet, to fully reflect international best practice in judging ex ante regulation. The OECD (2010) report for Ireland contains recommendations to rectify the situation.

Suggested Citation

  • Gorecki, Paul K., 2012. "Troubled Times: What Role for Competition and Regulatory Policy?," Papers EC10, Economic and Social Research Institute (ESRI).
  • Handle: RePEc:esr:wpaper:ec10
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    File URL: http://www.esri.ie/pubs/EC010.pdf
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    References listed on IDEAS

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    1. Honohan, Patrick & Donovan, Donal & Gorecki, Paul & Mottiar, Rafique, 2010. "The Irish Banking Crisis: Regulatory and Financial Stability Policy," MPRA Paper 24896, University Library of Munich, Germany.
    2. Durkan, Joe & Kirwan, F., 1976. "Quarterly Economic Commentary, June 1976," Forecasting Report, Economic and Social Research Institute (ESRI), number QEC19762.
    3. Gorecki, Paul, 2009. "A Code of Practice for Grocery Goods Undertakings and an Ombudsman: How to Do a Lot of Harm by Trying to Do a Little Good," The Economic and Social Review, Economic and Social Studies, vol. 40(4), pages 461-488.
    4. Paul Gorecki, 2011. "Do you believe in magic? Improving the quality of pharmacy services through restricting entry and aspirational contracts, the Irish experience," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 12(6), pages 521-531, December.
    5. Guglielmo Barone & Federico Cingano, 2011. "Service Regulation and Growth: Evidence from OECD Countries," Economic Journal, Royal Economic Society, vol. 121(555), pages 931-957, September.
    6. Gorecki, Paul K., 2012. "Competition Policy in Ireland: A Good Recession?," Papers WP427, Economic and Social Research Institute (ESRI).
    7. Durkan, Joe & O'Loughlin, B., 1979. "Quarterly Economic Commentary, June 1979," Forecasting Report, Economic and Social Research Institute (ESRI), number QEC19792.
    8. Connor, John M. & Bolotova, Yuliya, 2006. "Cartel overcharges: Survey and meta-analysis," International Journal of Industrial Organization, Elsevier, vol. 24(6), pages 1109-1137, November.
    9. Seán Diffney & John Fitz Gerald & Seán Lyons & Laura Malaguzzi Valeri, 2009. "Investment in electricity infrastructure in a small isolated market: the case of Ireland," Oxford Review of Economic Policy, Oxford University Press, vol. 25(3), pages 469-487, Autumn.
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    Cited by:

    1. Gorecki, Paul K., 2012. "Regulating Small Public Service Vehicles in Ireland: Is There a Problem of Oversupply?," Papers WP441, Economic and Social Research Institute (ESRI).
    2. Gorecki, Paul K., 2012. "Competition Policy in Ireland: A Good Recession?," Papers WP427, Economic and Social Research Institute (ESRI).

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    Keywords

    competition/cost/Ireland/Policy/recession/regulation;

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