Research Handbook on International Competition Law
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Research Handbook on International Competition Law

Edited by Ariel Ezrachi

This comprehensive Handbook explores the dynamics of international cooperation and national enforcement. It identifies initiatives that led to the current state of collaboration and also highlights current and future challenges. The Handbook features 22 contributions on topical subjects including: competition in developed and developing economies, enforcement trends, advocacy and regional and multinational cooperation. In addition, selected areas of law are explored from a comparative perspective. These include intellectual property and competition law, the pharmaceutical industry, merger control worldwide and the application of competition law to agreements and dominant market position.
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Chapter 9: Competition law and developing economies: between ‘informed divergence’ and international convergence

Kathryn McMahon


In recent years an increasing number of developing and emerging economies have adopted, or are in the process of adopting, some form of competition legislation. This can be explained in part by studies that have found favourable links between the creation of strong competition regimes and the level of per capita GDP and economic growth. It is also true that the enactment of these regimes is not always the outcome of autonomous decision-making but rather is the result of external pressure to meet certain institutional requirements for membership in international organisations, loan conditionality or demands from donors, or as part of a package of reforms aimed at economic and social development. Such mechanisms may be implemented to attract Foreign Direct Investment (‘FDI’) and to ensure that trade liberalisation and the removal of price controls is not undermined by the creation of artificial barriers to entry, cartels and protectionist policies. While international development theory may have moved on from the purely market-oriented reforms emblematic of the Washington Consensus, a strong competition law is still seen as an essential arbiter of neoliberal market reforms and privatised assets. It also sends a powerful political message of membership in the ‘market economy club’. The new institutional economics also finds important linkages between institutional performance and economic growth. The foundations of democratisation and the rule of law, such as judicial independence and an appeal structure, are seen to have an important indirect effect on economic development via their impact on legality.

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