ABSTRACT
The economic focus of structural reform is on behind-the-border impediments to the effective functioning of markets. The objective is to establish rules of competition and to remove barriers to competition wherever competitive markets can be expected to guarantee the most efficient allocation of resources. In cases where markets alone cannot deliver efficient outcomes, or where there are additional policy objectives besides efficiency, the task of structural reform is to regulate the markets, or pursue the additional policy goals, in ways that do least damage to economic efficiency. The APEC Leaders’ Agenda to Implement Structural Reform has prioritized
a number of policy areas that are central to structural reform. A sound economic and legal framework and system of corporate governance are required to establish the rules for competition. Competition policy is required to ensure that there are no artificial barriers to competition, including anti-competitive business practices. Sound regulatory policies and competition policies are required to ensure that when markets are regulated, this is done in an unobtrusive manner. Lastly, sound public sector management is required to hold governments accountable for all the ways in which they affect markets, including through their own procurement practices. Since the economic focus of structural reform is on behind-the-border
measures, the political economy of structural reform is primarily domestic. But structural reform is not easy, because of the diversity of economic interests involved. These include the following.
