The Political Economy of International Antitrust Harmonization

By McGinnis, John O. | William and Mary Law Review, December 2003 | Go to article overview

The Political Economy of International Antitrust Harmonization

McGinnis, John O., William and Mary Law Review


International harmonization of competition laws is in the air. A large number of academics have called for harmonization of the substantive content of antitrust laws. (1) They have noted the potentially large costs of divergent national antitrust laws applied globally. These costs include the transactions costs for companies complying with multiple regimes (2) and the costs of being governed by the most restrictive antitrust regime, even if that regime is suboptimal. (3) More importantly, as a practical matter, the recent Doha meeting of the World Trade Organization (WTO) has called for the next round of world trade talks to take steps toward harmonization, including harmonization of certain core substantive standards. (4) Thus, the intellectual impetus for harmonization now may enjoy a plausible forum for its realization.

In my view, substantive harmonization, even if limited to core competition standards, would be a major mistake. It is undoubtedly true that multiple regimes impose some costs, but substantive harmonization--by which I mean a single international regime binding on all nation states in at least some areas of antitrust--also has potential costs. An international lawmaking regime creates high agency costs because it is less subject to democratic control than national regimes. (5) It also imposes costs by discouraging beneficial change, as the regime once in place will be difficult to alter. (6) Moreover, the appropriate scope of antitrust law in different nations may differ, depending on such factors as the size of their markets, their openness to trade, and their administrative competence in enforcing regulatory laws. (7) Thus, an international regime might well lead to an overall worse world competition policy.

The long-run costs of a substantive antitrust regime are particularly problematic in a world that is not static. As information costs, transportation costs, and trade restrictions decline, it may well be that the appropriate scope of optimal antitrust rules will tend to narrow as market processes become better correctives to market imperfections than government intervention. The lock-in costs of an international regime thus are particularly high in a world in which the pace of change is ever increasing.

In contrast to substantive harmonization, I offer an argument for a limited and modest antidiscrimination international antitrust regime located within the WTO. The rationale for this regime, however, comes principally from international trade law rather than antitrust law. Foreign bias in competition laws is likely to become a greater problem as the WTO eliminates tariff and other barriers to trade in goods and services. The WTO should block substitution of discriminatory antitrust law for barriers that it has removed in order to sustain progress in world trade. This effort would be a modest extension of its existing mission: it already attempts to prohibit many other forums of regulatory discrimination that interfere with exporters' market access.

The antidiscrimination model also has advantages over substantive harmonization, because formulating and applying antidiscrimination rules have fewer agency costs than formulating and applying substantive rules. (8) Moreover, the antidiscrimination model permits continued innovation and change in substantive rules, thus facilitating continued debate regarding the optimal content of regulation. (9)

Part I of this Article will critique the arguments for substantive harmonization of antitrust laws. It will suggest that these arguments are unpersuasive because they fall to show that the costs of our decentralized system of competition law are greater than the agency costs and associated pathologies of more centralized rule making and enforcement. In particular, arguments for substantive harmonization fail to recognize that a decentralized system has a certain dynamism over the long-run: the conflicts between different systems may become a focus of public attention and lead to better laws. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Cite this article

Cited article

Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25,

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

The Political Economy of International Antitrust Harmonization


Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25,

    New feature

    It is estimated that 1 in 10 people have dyslexia, and in an effort to make Questia easier to use for those people, we have added a new choice of font to the Reader. That font is called OpenDyslexic, and has been designed to help with some of the symptoms of dyslexia. For more information on this font, please visit

    To use OpenDyslexic, choose it from the Typeface list in Font settings.

    OK, got it!

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search


    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.