Competition, Regulation, and Efficiency in Service Industries

Martin Neil Baily

Martin Neil Baily Senior Fellow Emeritus - Economic Studies, Center on Regulation and Markets

Discussants: Robert J. Gordon and

Robert J. Gordon Stanley G. Harris Professor of the Social Sciences - Northwestern University

Timothy F. Bresnahan

TFB

Timothy F. Bresnahan Stanford University

IN THIS PAPER I examine the regulatory and competitive environments in which four service industries operate in Europe and Japan, suggesting how certain types of regulation and the lack of adequate competition reduce productivity. I then present estimates of the relative productivities of these industries compared with the United States and suggest that in practice, the differences in the competitive environments of these countries have led to differences in the productivities of the industries.