Page 37 - Azerbaijan State University of Economics

THE ROLE OF COMPETITION ADVOCACY IN TRANSITION AND DEVELOPING ECONOMIES

In several industrial countries (notably Australia, Canada, New

Zealand, the United Kingdom, and the United States) such initiatives
have been successfully adopted. Thus in the provision of electricity,

separation has been made between generation, transmission, marketing,
and after-sales service. Similar separation has been put into effect in

telecommunications, especially in the markets for long distance services

and the provision of equipment, so that consumers are accorded greater
choice and lower prices thorough competition. Similar headway has been

made in the provision of services in other markets that were previously
subjected to extensive regulation - namely, airlines, trucking, intercity

bus services, railways, and water and sanitation. Few economic issues

are likely to be more important or controversial in transition and
developing economies than the privatization and restructuring of these

infrastructure industries. The competition agency can and should
participate in the debate on these issues.

The competition agency may also participate in a limited and
appropriate way in the setting of industry standards by government

authorities, such as safety and environmental standards or license

requirements. The role of the competition agency is not to intervene in
the technical aspects of such standards-setting, but to help ensure that the

standards are transparent and nondiscriminatory and that they do not
unnecessarily restrict competition among service providers.

The competition authority may also act as competition advocate on
a case-by-case basis in regulated industries. To the extent that the law

permits, it can intervene in specific regulatory proceedings to present the

case for competition. Such activities are resource-intensive, however,
and the agency should choose its cases carefully. Participation in

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