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Product Market Competition and Economic Performance in Iceland

Author

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  • Thomas Laubach
  • Michael Wise

Abstract

This paper discusses the current state of product market competition in Iceland, including the legal and regulatory framework, and suggests directions for further improvement. Given the size of the economy, efficiency considerations dictate high concentration in many markets, and preventing abuse of market dominance is therefore a challenging task. Changes to competition law since the early 1990s have strengthened competitive forces in many sectors of the economy, and proposed amendments to that law would further improve market surveillance. The changes in the regulatory framework for telecommunications have helped vigorous competition to develop in most segments, but there remain problems in pricing of access to the local loop. In the still publicly owned electricity sector, however, competition in generation and sales is so far virtually non-existent despite new legislation. Other policies discussed include agricultural support, policies towards foreign direct investment, and public procurement and provision of publicly funded services. Concurrence sur les marchés de produits et performance économique en l'Islande Le présent document de travail examine l’état actuel de la concurrence sur les marchés de produits en Islande, sous l’angle juridique et réglementaire notamment, et suggère un certain nombre d’améliorations possibles. Étant donné la taille de l’économie, des raisons d’efficience impose une forte concentration sur de nombreux marchés et il est donc d’autant plus indispensable d’éviter les abus de position dominante. Les modifications apportées au droit de la concurrence depuis le début des années 90 ont renforcé les forces concurrentielles dans de nombreux secteurs de l’économie et les amendements proposés permettraient d’améliorer encore la surveillance des marchés. S’agissant des télécommunications, l’évolution du cadre réglementaire a permis le développement d’une concurrence intense dans la plupart des segments du marché, mais des problèmes subsistent en ce qui concerne la tarification de l’accès à la boucle locale. En revanche, dans le secteur de l’électricité qui est encore entre les mains de l’État, la concurrence est pratiquement inexistante jusqu’ici au niveau de la production et de la commercialisation, en dépit des nouvelles dispositions législatives. Les politiques concernant le soutien à l’agriculture, l’investissement direct étranger, les marchés publics et les services publics sont également examinées.

Suggested Citation

  • Thomas Laubach & Michael Wise, 2005. "Product Market Competition and Economic Performance in Iceland," OECD Economics Department Working Papers 426, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:426-en
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    File URL: http://dx.doi.org/10.1787/605284451863
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    Cited by:

    1. Hüschelrath, Kai, 2008. "Is it Worth all the Trouble? The Costs and Benefits of Antitrust Enforcement," ZEW Discussion Papers 08-107, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.

    More about this item

    Keywords

    competition law; concurrence sur les marchés de produits; industrie de réseau; loi de la concurrence; marchés publics; network industries; product market competition; productivity; productivité; public procurement; regulatory reforms; réforme de la réglementation;

    JEL classification:

    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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