Do Product Market Reforms Work? Assessing Regulatory Changes Impacting Competition

ABSTRACT

We create a new dataset that characterizes studies of product market reforms implemented from 1932 to 2011. We examine the size and origins of differences in estimated impacts based on an OECD classification scheme for potentially competitive restrictions of regulation. The median impact from switching to a pro‐competitive environment is a 19% price decline. Competition‐restricting regulations that are directed at specific societal objectives, such as health, safety, education, the environment, and financial stability, have lower price increases than the price declines from regulatory changes creating greater competition. The findings support the view that special interests obtain large benefits from favorable regulation. These findings can help policymakers when balancing the effects of competition‐enhancing regulatory reform against other societal objectives.