Competition for Shared Prosperity

Effective competition policy creates well-functioning markets capable of delivering quality goods and services. Such efficient markets are particularly crucial to low-income households. They allow these households to generate sustainable income growth, and contribute to their welfare as consumers through lower prices and greater access to a larger variety of goods and services. However, market and institutional failures that hinder competitive rivalry between firms can reduce these benefits. Increasingly, efforts are being made to assess the specific sources of these types of failures and their impact on low-income households. The empirical evidence on the direct link between competition, poverty and shared prosperity is still very limited. There is considerable scope for expanding the policy research agenda and improving the empirical methodologies for linking measures of competition to alleviation of poverty, shared prosperity, and inclusive growth. The Global Engagement initiative between the WBG and OECD aims to broaden the evidence base on the welfare and income effects of lack of competition and on potential policy responses to minimize the negative impacts of market distortions. This initiative seeks to expand evidence both in developed and developing economies on the effects of competitive markets and procompetitive reforms on the welfare of low-income citizens. This Book is an outcome of this initiative and aims to respond to the question of how limited competition in sectors where low income individuals are more engaged affect shared prosperity – both in terms of the mechanisms of impact and the magnitude of impact.