The Markets and Competition Policy Assessment Toolkit

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The Markets and Competition Policy Assessment Toolkit (MCPAT)

Competitive markets are essential for private sector development, improving efficiency, and delivering consumer benefits such as lower prices and greater choice. They are the backbone of inclusive and sustainable economic development. However, markets do not always function optimally on their own. Policy interventions, when carefully designed, can fix market failures and create an environment where competition thrives.

The Markets and Competition Policy Assessment Toolkit (MCPAT) is a comprehensive resource that helps policymakers and development practitioners to identify, address, and prevent obstacles to well-functioning markets. Drawing on successful pro-competition policy reforms implemented in over sixty countries over the past decade, the MCPAT combines theoretical foundations with real-world examples to help practitioners identify market distortions and implement reforms. Beyond competition law, it provides a framework for embedding competition and market-driven principles into broader economic policy. Ultimately, the toolkit aims to empower policymakers, public officials, and development practitioners to create and sustain well-functioning markets that drive inclusive and sustainable growth.

Structure of the toolkit

The toolkit is divided into three parts, each addressing key aspects of competition policy:

Part 1: Understanding markets and competition policy
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• Chapter 1 introduces the foundational principles of competition analysis, debunks common myths, and emphasizes the broader ecosystem of market institutions beyond competition authorities. It highlights how market and competition policies can drive productivity and efficiency while addressing development challenges.

Part 2: Diagnosing market issues
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• Chapter 2 provides tools to assess markets, such as market structure, dynamics and productivity, while examining the role of government interventions in shaping outcomes.
• Chapter 3 explores how governments influence markets through rules and resource allocation that address market failures and enable market creation.
• Chapter 4 identifies government interventions that may distort markets: regulations and other policy interventions - industrial policies, public procurement, and state-owned enterprises – that restrict entry, facilitate collusion or distort the playing field.
• Chapter 5 outlines necessary elements to address anticompetitive conduct and anticompetitive mergers.

Part 3: Implementing pro-competition reforms
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• Chapter 6 focuses on designing policy alternatives that minimize distortions while achieving public policy objectives.
• Chapter 7 delves into tools for tackling anticompetitive behavior, strengthening enforcement, and ensuring effective merger control.
• Chapter 8 offers guidance on implementing reforms, including prioritization, stakeholder mapping, and strategies to address political economy issues and institutional challenges.

The annex includes country examples to illustrate the implementation of the toolkit and instruments to collect information to apply the MCPAT.

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