Key Factors for a Successful and Effective Competition Agency William E. Kovacic King’s College London ICN AEWG Workshop Botswana, 10 March 2016
Rationale for ICN AEWG Botswana Workshop • The Remarkable Transformation • From <20 systems in 1990 to about 130 in 2016 • 2016: Approximately 130 systems • Earlier: Pass the Law, All Else Falls into Place • Today: Quality of Institutions Shapes Results • Nothing easy or automatic about implementation
This Morning’s Agenda • Effective and Successful Defined • Ten Important Characteristics • Virtuous Cycle • Personal Views only • Contact: firstname.lastname@example.org
Resources • Hyman & Kovacic, Consume or Invest? What Do/Should Regulators Do?, Washington Law Review (forthcoming 2016) • Hyman & Kovacic, Institutional Design, Agency Life Cycle, and The Goals of Competition Law, Fordham Law Review (2012) • Kovacic & Hyman, Competition Agency Design: What’s on the Menu?, European Competition Journal (2012) • Kovacic, Creating a Respected Brand: How Regulatory Agencies Signal Quality, George Mason Law Review (2015)
“What Is the Basis for the Grade in This Course?” • Effective and Successful Defined • Most Generally: Raise Economic Performance • Good Decisions to Intervene, Not to Intervene • Good Technique: Organization and Operations
Role of Experiments and Learning • Inevitable Process of Early Testing • Example: US merger review reforms 1976 • Consume or Invest • Early Decades: Institution Building
I. Define Goals • Everything Starts With Clear View of Aims • Focus agency’s staff • Stimulate external debate • Connect Aims, Programs, Results • Manage Expectations • Heroic expectations vs. actual capabilities
II. Conscious Plan to Set Priorities and Strategy to Achieve Them • Common Model: Agency as Fire Department • Ask: What Gives Best Returns to Society? • Portfolio: Balance risks and returns • Match Commitments to Capabilities • Who will do it? • What will it cost? • How long will it take? • How will we know it is working?
III. Branding • Reputation: Smart, Open, Honest, Courageous • Function of process and substantive programs • Impact on external bodies: courts, legislators, ministers, other regulators, businesses, the public • Marketing • Reinforcement in all external communications • Articles, briefs, reports, speeches • Communications program
Communication and Education • Is an Agency Effective Only When the Media and Commentators Say It Is? • Education and Marketing • Traditional means • New media
IV. Problem-Solving vs. Case-Centric Orientation • Traditional Focus: Cases and Big Cases • “We’ve been very busy” • Activity is not the same as accomplishment • Take-offs vs. landings • Short term vs. long term • Are Cases Important? Of Course • Impact, credibility, capability • Emerging View: How Best to Solve Problems?
V. The Right Mix of Tools • Law Enforcement: The Anchor Tenant • Advocacy • Research
VI. Investments in Capacity • Agency Infrastructure • “Research and Development” Budget • Data collection and studies • External Consultations: Hearings, Workshops • Partnerships with “Co-Producers” • Example: Academic research centers
VII. Internal Quality Control • Aim: Systems to Test Theory and Evidence • Counteract internal confirmation bias • Routine Element of Operations • Not merely response to crisis • Ethical Safeguards • Confidentiality
VIII. Build Human Capital • Recruitment: Links to Academia • Retention: Skills Development • Cooperation across Agencies • Preservation of Know-How • Electronic data sets • Capital budget: Investments in technology
Cooperation With Other Authorities • Why Pool Experience? Health Care Analogy • Refine analytical frameworks • Absorb knowhow from applications • Benchmark operations/management • Address common needs: e.g., training • Example: FTC International Fellows Program
IX. Assess Performance • Relevant Question: Did Programs Improve Economic Performance? • Question We Prefer to Answer: What Was the Agency’s Level of Activity?
Evaluation: Programs and Processes • What Worked and What Did Not • Increasing Importance of Assessing • Program outputs • Operations • Means: Internal Assessment, Consultation with External Experts, Peer Review
Evaluation: Periodic Assessment • Cumulative Nature of Policy Development • Evaluation by Insiders and Outsiders • Upgrades in powers, processes, organization
X. Leadership • Right Mix for the Leadership Team • Head and senior managers • Long-Term Orientation: Cumulative Contributions Over time • Special Issues with a College • Political Autonomy and Legitimacy
The Virtuous Cycle • Experimentation • Assessment • Refinement • Fred Hilmer’s Commandment