Cost of sugar industry regulations
Market regulations are exercised to ensure efficiency in production, streamline standard-setting, and provide protection to consumers by ensuring quality products at competitive prices. Alternatively, regulations are aimed at providing a legal framework to create a business environment based on healthy competition for improving economic efficiency, developing competitiveness, and protecting consumers from anti-competitive practices. Though regulations in the market are often justified, they do not always achieve their social objectives or live up to public expectations. The success or effectiveness of regulations is complementary to well-functioning, transparent, and accountable institutional environment. Any friction either at legislation stage or at enforcement stage may result in regulatory failure. Similar might be the effect of an ineffective dispute settlement mechanism. Sugar industry in Pakistan is a case of regulatory failure where we have observed frequent instances of hoarding/over-pricing, rents seizing, and political capture, all having significant costs to the society.
Download full PDF
