The Argument for Robust Competition Supervision in Developing and Transition Countries

This is a draft of an article that will be published - after some editorial revision - in the Journal of Governance and Regulation. It discusses first the differences between market economic models, socialist or planned economies, and economies controlled by monopolies or cartels, to make the case for competition supervision. Subsequently it argues for a broad approach to competition supervision - beyond a narrow view of antitrust law. This part discusses monopoly or dominant position and the criteria to measure them. It reviews the reasons for merger control as a preventive step against monopoly or dominant position. Finally it discusses the issues related to collusion in the form of cartels and how to detect them. The third part of the paper focuses on the best ways for developing and transition countries to introduce or reinforce comprehensive competition supervision: Functioning institutions and how they have to be empowered and structured; priorities to be set; how competition oversight has to be embedded in the legal system, including court review; and why effective enforcement is so important and how it can be promoted. In an annex, there are links to some 75 countries which have newly introduced competition laws in the past 25 years and their legislative materials. Finally, there are links to another 30 countries which have substantially revised their legislative bases in the same time frame.