Table of Contents

The Economic Characteristics of Developing Jurisdictions

The Economic Characteristics of Developing Jurisdictions

Their Implications for Competition Law

Edited by Michal S. Gal, Mor Bakhoum, Josef Drexl, Eleanor M. Fox and David J. Gerber

There is ongoing debate as to what competition law and policy is most suitable for developing jurisdictions. This book argues that the unique characteristics of developing jurisdictions matter when crafting and enforcing competition law and these should be placed at the heart of analysis when considering which competition laws are judicious. Through examining different factors that influence the adoption and implementation of competition laws in developing countries, this book illustrates the goals of such laws, the content of the legal rules, and the necessary institutional, political, ideological and legal conditions that must complement such rules. The book integrates development economics with competition law to provide an alternative vision of competition law, concluding that ‘one competition law and policy size’ does not fit ‘all socio-economic contexts'.

Chapter 3: Lifting the veil: rethinking the classification of developing economies for competition law and policy

Tamar Indig and Michal S. Gal

Subjects: economics and finance, development economics, law - academic, competition and antitrust law, law and development

Extract

The advancement of competition law and policy in developing economies (DEs) has been the center of major efforts at international, regional and national levels. Such steps, it is widely believed, can potentially increase welfare, at least in many circumstances. Accordingly, a rich body of theoretical and empirical research emerged in order to suggest the optimal design of competition policies in DEs. Yet a bothering generalization characterizes much of the literature. Its object, DEs, is broadly defined. As a result, divergent economies are often grouped together—from Micronesia to India, from Zimbabwe to the Philippines. An implicit assumption lies at the basis of such grouping: that DEs have enough socio-economic characteristics in common, which differ from the characteristics of other groups, to justify a reference to them as a single group. This chapter challenges this assumption, when applied for purposes related to competition law and policy. Indeed, the most commonly used definition of DEs is based on a single factor: the size of per capita gross national income (GNI). This definition captures 65 percent of the jurisdictions of the world and 81 percent of the world population. Its single focus creates a black box with regard to the market characteristics that lead to a limited national income.

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