
Known unknowns: competition, discovery and the limitations of CBA
Government economic service conference July 2008

Government economic service conference July 2008

We have been asked by the Civil Aviation Authority to comment on the Competition Commission (CC)`s paper on Assessment of Competition at Stansted Airport (ACP) and on a paper by Dr David Starkie and Professor George Yarrow in response to the CC`s paper. Our comments are on the general approach taken by the CC and by Starkie and Yarrow.

Australian Competition and Consumer Commission, Regulatory Conference, Queensland, July 2008

PRESENTATION TO CAVE REVIEW OF COMPETITION & INNOVATION IN WATER MARKETS
UNIVERSITY OF WARWICK
9 JULY 2008

Australian Competition and Consumer Commission Regulatory Conference, Queensland, July 2008

The Traffic Management Act 2004 (TMA) provided for the introduction of a number of measures intended to address problems associated with urban and inter-urban congestion on the road network. This included providing the potential for permit schemes to be introduced by highway authorities such that street works (for example, utility repair work that involves occupation of some part of the highway) could not be undertaken without a permit, and a fee could be levied for the provision of such a permit. Secondary legislation was required in order to allow for the introduction of permit schemes, and more detailed enabling provisions were subsequently introduced under the Traffic Management Permit Scheme (England) Regulations 2007 (hereafter referred to as „the permit scheme regulations‟).
This report provides a review of the Regulatory Impact Assessment that was prepared by the Department for Transport (DfT) in the development of the permit scheme regulations. Some comments are also provided on the relevance that the issues raised in this review have for ongoing and future policy developments with respect to permit schemes

The introduction of next-generation access networks (NGANs) in communications changes the market and technological context in which public policy operates. It does so in a way that, in terminology used in the economic analysis of innovation, can be said to be ‘drastic’ in nature. This poses a number of new challenges for the development of regulatory policy, some of which are identified and explored in this paper.
When new problems arise, one of the first analytical tasks for regulators is to discover perspectives that might be of assistance in thinking through the issues that emerge. These alternative ‘frames’, which will also be explored below, are not solutions to the policy problems, but rather are ways of approaching the issues to assist the development of policy positions.

Our main conclusion is that competitive discovery processes have potentially very important roles to play in the water sector, particularly at the wholesale level, where we know that we know relatively little about the economic value of water, including its spatial and temporal variations, and how to use it most wisely.

This Report is published as a contribution to the current debate in the UK on the prospects for the development of competition in water, sewage and sewerage services (henceforth abbreviated to ‘water services’), and on the forms that such competition might take. It does not seek to cover all aspects of relevant policy in the sector, but rather focuses on a number of key issues, concepts and trade-offs that appear to be of central importance for policy development.

The OFT Report on the PPRS is 114 pages long and, collectively, the annexes add up to 924 pages. As might be expected of a text of this length, it contains a large number of different strands of argument/reasoning and covers a wide range of issues. Almost inevitably, there are inconsistencies in places, and, more avoidably (but also a very common tendency in this type of document), there are many points at which the reasoning drifts off into economic theorising that is only loosely related to the principal issues and evidence at hand.
For obvious reasons it is impossible in a review such as this to assess each and all of the elements of the Report, and some selection mechanism or filter must be applied to the material. The most straightforward way to deal with this issue is to focus upon those aspects of the analysis which the OFT itself considers to be the most significant, as indicated/revealed by what is said in the main text of the Report.

The prevalence of obesity has featured prominently in the news alongside a range of other diet and lifestyle issues, attracting a good deal of attention from various parts of government and from other public authorities.
Regulatory reactions to the observed tendencies exhibit familiar pathologies: a repeating pattern in which (a) one of more aspects of human conduct comes to be defined as a problem (problematisation), (b) there are calls for government or a public authority to do something about the problem, and (c) the authorities oblige with simplistic actions whose wider, more diffuse consequences are frequently ignored.
Our intention is not to set out a comprehensive analysis of the relevant regulatory issues associated with the prevalence of obesity, but rather to provide an indication of how best-practice policy development might begin to approach those issues.

Written evidence of Professor George Yarrow, Director, Regulatory Policy
Institute.

Members of the Regulatory Policy Institute have been longstanding supporters of Cabinet Office initiatives to promote better regulation, from the earliest days of these exercises. The Institute has on occasion also undertaken research projects that have contributed to the initiatives. Whilst the following remarks are critical of the current proposals, they are nevertheless the views of ‘friends of the process’.

The primary focus of this paper is the contribution of “reverse eAuction processes”, characterised by on-line, descending price bidding, to NHS procurement strategies. There has for some years now been considerable interest in the use of such auctions in the procurement of goods and services by both private and public sector organisations. Over the last year or two, this interest has been particularly intense in the UK public sector, and it has been accompanied by claims of substantial gains when these types of arrangements are introduced.

A presentation by George Yarrow to the Judicial Studies Board’s Competition Law Course, 9-10 January 2006.

A report prepared for the Cabinet Office Regulatory Impact Unit.

Sparks & Flames, Amsterdam, 4 December 2003

The substantial quantities of radioactive waste which exist in the UK largely as a result of the activities of government agencies or government owned companies since the 1940s, raise important and difficult questions concerning how trade-offs between both the levels and distribution of costs and environmental quality/safety associated with different waste management decisions.
This paper is concerned with how the institutional arrangements for dealing with issues surrounding radioactive waste management can best be developed. Our main focus is on those factors that at other times and in other industries have been shown to influence regulatory developments.

Delivered as part of ‘Is there an end game for regulation with competitive markets’, Hertford Seminar in Regulation 2000

In France, the debate on regulation of public services often excludes the water sector, one of the few sectors not affected by post-war nationalisation. The industry is decentralisied, with quality and price placed on the large number of communes. The 1990s saw increasing social demands in favour of better regulaton.

This study highlights limits to real reform in the electricity and telecommunications sectors in Spain

This is an introduction to a book (edited by Claude Henry, Michel Matheu and Alain Jeunemaitre and published by OUP 2001) assessing new forms of public regulation in Europe and indicating what has already been learned and suggesting the questions that need to be addressed.