Regulation in Services: OECD Patterns and Economic Implications

OECD Economics Department Working Paper No. 287

46 Pages Posted: 15 Feb 2001

See all articles by Giuseppe Nicoletti

Giuseppe Nicoletti

Organization for Economic Co-Operation and Development (OECD) - Economics Department (ECO)

Date Written: February 8, 2001

Abstract

The paper looks at patterns of regulation in service industries and explores their implications for service performance. Focusing on restrictions to market mechanisms, a map of the state of service regulation in OECD countries is provided, based on data recently collected and summarised by the OECD. The paper also surveys the available cross-country empirical evidence on the effects of regulatory reform on service productivity, prices and innovation. Finally, it discusses ways in which regulation can encourage competition, efficiency and investment in those segments of the service industries where non-competitive elements persist. The main conclusions reached are: i) in the past two decades OECD governments extensively reformed regulatory environments in both competitive and network service industries, generally making them closer to market mechanisms; ii) however due to differences in initial conditions and in the pace of reform, within each service industry the dispersion of regulatory approaches is still wide and a large scope for further reform exists; iii) cross-country empirical evidence suggests that these reforms could contribute substantially to improve economic performance and living standards in the OECD area; iv) but to take full advantage of the reform process, policies in network service industries should take into due account the implications of regulatory settings for the incentives of regulated firms to invest and innovate.

Keywords: Regulation, Liberalisation, Privatisation, Regulatory Reform, Network Industries, Competition Policy, Services

JEL Classification: L50, L51, L43, K23, L9, L80

Suggested Citation

Nicoletti, Giuseppe, Regulation in Services: OECD Patterns and Economic Implications (February 8, 2001). OECD Economics Department Working Paper No. 287. Available at SSRN: https://ssrn.com/abstract=259773 or http://dx.doi.org/10.2139/ssrn.259773

Giuseppe Nicoletti (Contact Author)

Organization for Economic Co-Operation and Development (OECD) - Economics Department (ECO) ( email )

2 rue Andre Pascal
Paris Cedex 16, MO 63108
France
+33 1 4524 8730 (Phone)
+33 1 4524 1347 (Fax)

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