Leveraging Competition Policy for SME Development and Shared Prosperity
59 Pages Posted: 17 Oct 2017
Date Written: October 17, 2017
Competitive markets provide the best conditions for producing low-priced, high-quality, and innovative goods and services, which benefit all of society. The poor especially benefit from competition through better standards of living and participation in more economic activities. With more dynamic markets, more people can engage in entrepreneurship and gain productive employment. Competition policy fosters the right environment by protecting firms and consumers from the anti-competitive behavior of firms, as well as anti-competitive regulations and inefficient business involvement of government.
SMEs are an important economic driver through which the potential of competition policy to contribute to shared prosperity can be realized. While competition policy cannot serve as the main framework for the development of SMEs, it addresses market distortions that decrease competitiveness and efficiency. Given limited resources, competition authorities must prioritize sectors in which the largest impact may be made, especially in terms of shared prosperity outcomes, namely, poverty reduction, real income growth, and the creation of productive and meaningful employment.
An effective competition regime must be supported by a culture of competition encompassing all transactions and interactions, as well as comprehensive socioeconomic and political reform that enhances business and government efficiency. This culture of competition must be underpinned by trust and confidence among people, businesses and institutions, which reinforces the dependability of transactions and forms the foundation of expanded economic interaction and cooperation.
Keywords: competition policy, SMEs, shared prosperity, Philippine Competition Commission, Philippine Competition Act
JEL Classification: L40, L49
Suggested Citation: Suggested Citation