Their Implications for Competition Law
Edited by Michal S. Gal, Mor Bakhoum, Josef Drexl, Eleanor M. Fox and David J. Gerber
Recent decades have witnessed a trend of privatization, deregulation and liberalization – and not only in industrialized countries but also in many countries that used to be called developing and that have more actively pursued the path of market-economy-based industrialization. There is a dominant consensus among economists that market economies require an effective competition policy regime in order to protect competition against its self-eroding tendencies: next to being successful by a welfare-increasing competition on the merits, companies may experience incentives to secure rents by engaging in anti-competitive strategies and arrangements. Consequently, the number of (more or less) active competition policy regimes has significantly increased, in particular throughout the 2000s. While the predominantly beneficial character of this development is hardly in doubt, the question ‘what kind of competition policy is adequate for industrializing countries’ is much more controversial. On the one hand, transplanting institutions and agendas from successful competition policy regimes like the United States or the European Union represents a strategy that is both advocated and also what many industrializing countries have actually attempted to do. However, it implicitly assumes that there is a ‘one size fits all’ competition policy, i.e. one ‘right’ competition policy that is optimal irrespective of a country’s economic and social characteristics. In this chapter, we argue from an economics perspective that this is not the case.
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