The OECD has published a report on competitive neutrality which occurs where no entity operating in an economic market is subject to undue competitive advantages or disadvantages. The objective of the report is to identify the issues connected with maintaining a level playing field between public and private businesses, and to shed light on remedies to these challenges by examining best practices and current practices in OECD countries. In particular, the analysis identifies the following eight key “building blocks” which should be taken into account by governments in order to achieve competitive neutrality: (1) streamlining government business; (2) identifying the costs of any given function and developing appropriate cost allocation mechanisms; (3) government business activities operating in a commercial and competitive environment should earn rates of return like comparable businesses; (4) where the performance of public policy functions is required by government businesses, adequate, transparent and accountable compensation should be provided; (5 & 6) government businesses should operate in the same tax and regulatory environment as private enterprises to the largest extent possible, (7) debt neutrality should remain an important area to tackle; and (8) procurement policies and procedures should be competitive, non-discriminatory and safeguarded by appropriate standards of transparency. Read more.
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The Organisation for Economic Cooperation and Development publishes report on competitive neutrality
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