Economic Development, Poverty, and Antitrust: The Other Path

Innovation and Economic Growth and Competition Policy and Antitrust

Article Snapshot

Author(s)

Eleanor Fox

Source

Southwestern Journal of Law and Trade in the Americas, Vol. 13, p. 211, 2007

Summary

This article discusses the costs and benefits of structuring antitrust law differently in developing countries.

Policy Relevance

Developing countries can benefit from creating country specific antitrust laws. Developed nations can assist by providing guidance and experience in antitrust regulation.

Main Points

  • Antitrust laws and the agencies that enforce them are charged with preventing dominant companies from using anticompetitive tactics to stifle competition.
     
  • Developing countries are often tasked with creating antitrust laws and agencies as their economies begin to grow.  The developing country then faces the choice of either modeling its antitrust laws after those of more developed nations or attempting to create its own.
     
  • The use of a preexisting set of antitrust laws comes with the benefit of using a tested system, but the preexisting antitrust laws may not be the best means of achieving the goals set out by the developing nation.
     
  • Many factors ought to be considered in designing antitrust laws in developing countries.

    • Developing countries’ markets are much less dynamic and open than their counterparts in developed countries.
       
    • Most developing countries have insufficient resources to effectively run competition offices.
       
    • The necessary degree of antitrust intervention.
       
    • The benefit of following an already tested path.
       
  • Developed countries with mature antitrust laws can help by cooperating with developing nations in creating nation specific antitrust laws.  This cross-national cooperation will prove beneficial to both parties as it will help prevent activities by international cartels.

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