The Economic Characteristics of Developing Jurisdictions
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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'.
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Chapter 2: What features measure economic competition in developing countries?

Ignacio L. De Leon


In this chapter we will examine whether developing countries possess special traits that distinguish them from countries undergoing further stages of economic development, as far as competition policy is concerned, and associated with this, aim to identify the relevant metrics to assess competition policy effectiveness in these countries. The central question of this chapter is, therefore, about the special features of competition policy in developing countries, which are distinct from that applied in industrialized countries. Usually, this question has been answered with the help of textbook economics, associating the tenets of the so-called ‘SCP Paradigm’ developed by Joe Bain (1959) with the market structure that prevails in these countries, presumably, that is, ubiquitous high concentration and market information asymmetries. In contrast, we take an institutional approach in this chapter that links competition policy’s effectiveness to the presence of reliable institutions and a policy agenda aligned with the protection of the rule of law. This is the sort of institutional setting that encourages the competitive endeavors of market agents in searching for market information gaps that they can profit from, by filling them with ‘better’ information about products or services until then unknown or inaccessible to consumers. In this ‘trial and error’ perspective of competition, market dominance, which is a key competitive factor under textbook economics, appears to be the outcome of the market process, rather than its prerequisite.

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