Competition and Development: Towards an Institutional Foundation for Competition Enforcement
25 Pages Posted: 5 Nov 2009 Last revised: 29 Mar 2010
Date Written: August 24, 2009
We bring together three strands of contributions to the study of institutions in the development process in order to lay down the foundations for an economic approach to the formulation of competition policies and competition law. First, we bring in different models of the political economy of development that incorporate interest groups and their influence in the political process and policy formulation. They show that when a small group of vested interests dominate economic policy there is little room for competition policy. Second, based on the theory of torts we use the theory of Glaeser and Shleifer to define the different types of competition law according to the capability to avoid subversion and elicit the optimal precaution of damages. This shows that competition regimes should be graduated by the level of institutional development. Third, we study how to characterize the level of institutional development with a composite index. Bringing together these three strands of research we are able to identify what type of competition policy regime should fit to each institutional regime. Moreover, we propose the type of antitrust law for each stage of development. This research should help policy makers and advisers to better ground competition regimes and laws. This type of approach of policy, grounded on the institutional background, should be applied to most of the areas of policy and law.
Keywords: Political models of development, Competition Policies, Competition Law, Institutions, Institutions and Development, Economic approach to law and development
JEL Classification: K21 ,K13, O29, L40, L50, O57
Suggested Citation: Suggested Citation