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 11: Consumer welfare and consumer harm: adjusting competition law and policies to the needs of developing jurisdictions

Josef Drexl


Competition economics and industrial organization theory in particular claim universal validity. This is based on neoclassical price theory as its theoretical foundation, which explains that economies suffer a welfare loss if they do not act against monopolistic behaviour. Thus, economic theory informs about the economic benefits of competition law and helps define its objectives. Based on a universal economic understanding, competition law aims at enhancing consumer welfare through banning anti-competitive conduct. Indeed, many competition economists and lawyers would apply such economic reasoning intuitively to all jurisdictions, inspired by a belief that the fundamental rules of how markets work are universal. Economic theory, including the goal of promoting consumer welfare, thereby emerges as the common ground of ‘global antitrust’ that creates a basis for convergence of the competition laws across different jurisdictions. This ‘world-view’ is presented in the Preface to the Global Competition Law and Economics by Elhauge and Gerardin, who describe ‘modern antitrust as global antitrust’ and identify the ‘common framework of antitrust economics’ as the theoretical foundation that links the different competition law systems of the world despite persisting differences.

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