A Methodology for the Evaluation of Competition Policy

The last couple of years have seen an increasing interest in the evaluation of competition policy. The Office of Fair Trading (OFT) in the UK, for instance, recently started to estimate the 'positive impact' of its activities on direct benefits to consumers and compare these numbers to the budget of the competition authority. The Dutch Competition Authority (NMa) follows a comparable approach to evaluate its competition policy enforcement and even extends the scope of the evaluation by investigating the impact of competition policy on macroeconomic factors such as growth and employment. These prominent examples of evaluations of entire competition policies are complemented by studies which concentrate on the evaluation and improvement of particular internal processes of competition authorities. Examples for this category are a study on the effectiveness of merger remedies by the European Commission (2005) or a similar study recently published by the UK Competition Commission (2008). Given the different types and scopes of recent studies in the area of evaluation of competition policy, it can create value to take a step backward and to raise the question of an appropriate general design or set-up of an evaluation of competition policy. This paper aims at providing an answer to this question. Based on the existing literature and experiences with policy evaluations in other areas of economic activity, the three-step / nine-building-blocks methodology provides guidance for evaluation projects and also assists in the identification of avenues for further academic research.

Hüschelrath, Kai and Nina Leheyda (2010), A Methodology for the Evaluation of Competition Policy, ZEW Discussion Paper No. 10-081, Mannheim, published in: European Competition Journal.