Browse by: "2005"

Competition policy was at the centre of market-driven reforms since the late 1980s that restructured Finland’s network monopolies and eliminated the many vestiges of corporatist control. The pace of change is slower now, as the role of market institutions in providing traditional government services presents novel and difficult issues about quality, equity, efficiency, and choice. The role of the competition body, the Finnish Competition Authority (FCA), is also changing. In the previous stages, its principal path of influence, after it made a mark with a strong early enforcement program against tolerated price fixing, was through advice and advocacy. As competitive markets are...

Electricity markets are prone to the exercise of market power due to a combination of factors including: inelastic demand, lack of extensive practical storage of electricity, transmission congestion, transmission loop flows and capacity constraints coupled with diversity in the marginal costs of different types of generators. The level of market power can vary rapidly in time according to changes in transmission congestion and fluctuating load levels. Given the propensity of the electricity market to market power, horizontal structural separation (or divestiture) of the generation market is a key policy tool. Some structural separation has been carried out, but on a relatively limited scale. But congestion segments electricity markets and contributes to the exercise of generator market power. This effect can provide the incentive for building new generation capacity. So a balance must be found between providing an...

Competition advocacy is especially critical for developing countries as their economic policies are undergoing fundamental market driven changes. Prerequisites for effective competition advocacy by a competition agency include a significant degree of independence from political influence, sufficient resource to support both its enforcement and advocacy functions, and credibility as an effective and impartial advocate for competition. Opportunities for competition advocacy are numerous: privatization; legislation, government policy and regulatory reform. The Second Latin American Competition Forum, jointly sponsored by the OECD and the Interamerican Development Bank (Washington 14-15 June 2004) discussed the...

Over the past few months, major equity markets generally have continued their upward trend, while interest rates at the long end of the maturity spectrum have declined. Meanwhile, credit spreads for both investment grade and sub-investment grade borrowers continue to be compressed and volatility appears to have diminished in most market segments.

Following the end of the “Cold War”, the OECD has, since the early 1990s, been conducting “Outreach” activities (i.e. policy dialogue and capacity-building cooperation activities with non-Member economies), first with the Central and Eastern European countries in transition, and now extending to many other emerging economies. These “Outreach” activities have of course included financial sector reform, as the financial sector is often considered one of the key sectors in assisting these economies’ developments. The OECD’s efforts in this area have focused on, and continue to give primary attention to, capital market reform (including corporate governance) as well as insurance and pension market policies and reform on a regional basis; they have been recently targeting Asia, as this...

Modern risk management has become an important tool for achieving strategic debt targets in the OECD area. In essence, risk management policies, based on the use of formal methods, are now an integral part of debt management in most OECD jurisdictions. In general, risk management tolerances and policies are approved (and often set) by the Ministry of Finance (or other appropriate Ministry). This strategy about risks entails an explicit political decision about the trade-off between costs and risks. The actual risk management operation is often run at a separate agency responsible for management of the sovereign debt or at the central bank if it manages the debt, and is typically segregated from other treasury...

The fixed nature of pension benefits under corporate defined benefit (DB) pension plans imply that plan sponsors face financial and potentially biometric risks. A large number of OECD countries have such DB pension schemes, whereby employees receive a specific payment upon retirement and for which sponsoring employers are responsible to some extent for meeting any shortfall in pension funding relative to liabilities, although, across countries, these schemes vary in importance. Recent financial market developments, including in particular the post-2000 equity market correction and declining interest rates have illustrated the vulnerability of DB plan sponsor companies to financial risks. While it is difficult to form a judgement about the exact magnitude of the funding gaps that have arisen, estimates of such gaps were considered to be of sufficiently large scale to raise concern amongst policymakers. Policy responses run the gamut from relief measures intended to lessen temporarily the financial pressures on sponsoring...

Collective Investment Schemes (CIS) have been one of the most significant developments in financial intermediation during the past few decades. OECD data indicate that CIS assets have been rising sharply as a share of national income and a share of financial assets in most Member countries. In addition to functioning as an effective vehicle for individuals to implement their preferred investment strategies, CIS already play a major role in providing for retirement income. This role is likely to grow in coming years. Overall, the experience of the investing public as well as policy makers has been highly positive. CIS have enabled even fairly small investors to participate in the strong growth of capital markets in the past two decades. CIS make it possible for relatively small...

The statistical exercise covers an extensive range of indicators. At this stage of the data collection, most of the relevant information was collected on autonomous pension funds, the fund type for which most of the detailed information was provided. However, autonomous pension funds do not represent the totality of pension plans’ activities. It would thus be important to obtain additional information, in particular on book reserve systems and pension plans administered under the...

This report focuses on one environmental instrument which is part of the UK’s wider programme of policies to deal with its various obligations to control climate change. The instrument is the Climate Change Levy (CCL) which takes the form of a tax on energy. However, the CCL cannot be viewed in isolation – it is part of a fairly elaborate package of measures, and its interaction with the other instruments in that package need to be understood. Accordingly, we first set out a brief history of the UK’s approach to climate change control, and describe the various components of the policy package. A detailed history of the CCL is then provided, and this is followed by an analysis of the features of the CCL, focusing particularly on the political factors that influenced its design, and the various reactions to it. Finally, we look at the likely future of the CCL in light of developments in climate change policy in the wider Europe.

This paper draws on the responses of DAC members to requests for ICT “lessons learned” and “good practice”, which can be found in the OECD document “ICTs for Development: Lessons Learned and Good Practices”. Members agreed that in ICT, as with all development co-operation, success or failure depends more on developmental processes rather than the specifics of the co-operation. Integrating ICTs into development co-operation is not, therefore, a special case, different from all other development interventions. It must follow basic principles of development co-operation good practice.