OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Product Market Competition and Economic Performance in Australia

The OECD Growth Study and other empirical work have shown that the strength of competition in product markets plays an important role in the economic growth process as well as contributing to a more efficient allocation of resources in a static sense. More intense competition is likely to encourage stronger efforts of managers to improve efficiency and induce higher innovative activity, leading to higher multi-factor productivity. This paper begins with a short review of Australia’s growth performance since the early 1990s and its possible link to strengthened competitive pressures and their interaction with other economic reforms. Attention is then turned to indicators of product market competition to gauge the strength of competitive pressures. This is followed by an assessment of the general competition policy framework and its role in promoting competition. The next section presents the framework of the National Competition Policy and reviews the completeness of the reform programme and the areas requiring further action. The paper then examines a number of sectors where regulatory policies can be expected to have particularly large impacts. The implications of trade liberalisation on Australia’s economic performance and the scope for further improvements are also discussed in some detail. The paper concludes with a set of policy recommendations. This Working Paper relates to the 2005 OECD Economic Survey of Australia (www.oecd.org/eco/surveys/australia).


Keywords: gas, rail, television broadcasting, health, trade policy, access regime, air transport, retail distribution, legal services, water, Dawson Review, NCP, ACCC, Trade Practices Act, multifactor productivity, road, national competition policy, electricity, telecommunications
JEL: H4: Public Economics / Publicly Provided Goods; K20: Law and Economics / Regulation and Business Law / Regulation and Business Law: General; L96: Industrial Organization / Industry Studies: Transportation and Utilities / Telecommunications; L50: Industrial Organization / Regulation and Industrial Policy / Regulation and Industrial Policy: General; Q4: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Energy; L94: Industrial Organization / Industry Studies: Transportation and Utilities / Electric Utilities; K21: Law and Economics / Regulation and Business Law / Antitrust Law; Q1: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Agriculture
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