Competition Law and Development

Competition Law and Development

Competition Law and Development

Competition Law and Development

Synopsis

The vast majority of the countries in the world are developing countries-there are only thirty-four OECD (Organisation for Economic Co-operation and Development) countries-and yet there is a serious dearth of attention to developing countries in the international and comparative law scholarship, which has been preoccupied with the United States and the European Union. Competition Law and Development investigates whether or not the competition law and policy transplanted from Europe and the United States can be successfully implemented in the developing world or whether the developing-world experience suggests a need for a different analytical framework. The political and economic environment of developing countries often differs significantly from that of developed countries in ways that may have serious implications for competition law enforcement.

The need to devote greater attention to developing countries is also justified by the changing global economic reality in which developing countries-especially China, India, and Brazil-have emerged as economic powerhouses. Together with Russia, the so-called BRIC countries have accounted for thirty percent of global economic growth since the term was coined in 2001. In this sense, developing countries deserve more attention not because of any justifiable differences from developed countries in competition law enforcement, either in theoretical or practical terms, but because of their sheer economic heft. This book, the second in the Global Competition Law and Economics series, provides a number of viewpoints of what competition law and policy mean both in theory and practice in a development context.

Excerpt

D. Daniel Sokol, Thomas K. Cheng, and Ioannis Lianos

One may be forgiven for asking what exactly is the purpose of this book. What exactly is meant by competition law and development? There are a few possible answers to this question. The most obvious answer is that it is about competition law in developing countries. Given that the vast majority of the countries in the world are developing countries—after all, there are only thirty-four OECD (Organisation for Economic Co-operation and Development) countries—there is a serious dearth of attention to developing countries in the international and comparative competition law scholarship, much of which has been preoccupied with the United States and the European Union.

Competition law is a regulatory tool to improve societal well-being. Competition law is a regulatory response to a market-based organization of the economy. As such, competition law is the backstop to correct market malfunctions. The market malfunction central to competition law is the exercise of monopoly power. Competition law and policy work within the larger development context to create a more competitive environment.

Competition law and policy has the potential to play an important role in greater economic development through the creation of competitive markets in the developing world. Competition law enforcement promotes higher economic growth. As competition reduces entry barriers, incumbent firms can no longer be supported through monopoly rents. As a result of competition . . .

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