REGULATORY REFORM IN RETAIL DISTRIBUTION

The main purpose of this paper is to analyse cross-country differences in the regulation of the retail distribution industry in the OECD area, focusing on the situation in 1998. Regulatory differences are cast against changes in the industry environment to highlight the potential interactions between regulation and market forces. A number of countries have extensively liberalised market access and price and service regulations. In some countries there is currently a tendency to introduce access restrictions for large outlets. In other countries market access has been traditionally hindered by restrictive regulations and administrative burdens. The available empirical evidence suggests that regulations that restrict shop opening hours and hinder access by imposing special requirements for outlet registration, siting and/or size thresholds curb the dynamism of the industry (e.g. lowering entry and exit rates, and preventing restructuring and modernisation) and competitive pressures, leading to lower employment growth and higher consumer prices.