Competition policy and development: key issues for developing countries – a briefing

This paper provides a briefing for developing countries to apprise them of the main issues which are relevant for development and social welfare in relation to the present and prospective discussions on competition policy in the WTO, UNCTAD, OECD and other fora. Although this is the immediate backdrop for an examination of competition policy in relation to economic development, the topic is urgent and important in its own right, because of important new developments in the world economy and because of significant structural changes within developing countries themselves. The main analytical conclusions for developing countries which emerge from the theoretical and empirical analysis of competition policy and economic development in this paper may be summarized as follows: 1)It is important for developing countries to have a competition policy which is designed to take appropriate account of their level of development and the long term objective of sustained economic growth. This is in part due to the potential effects of the international merger movement and also because of privatization, deregulation and liberalization which have occurred in the domestic economies of most developing countries. 2)A distinction is made in this analysis, between, on the one hand, countries at low levels of development and with meagre institutional capacity and, on the other, semi-industrial countries with greater institutional capabilities. The paper concludes that the types of competition policies adopted by the US and the UK are not appropriate for either group of developing countries. 3)If the concerns of developing countries with respect to competition policy are to be addressed seriously, this paper suggests that the concepts used in the current WTO/OECD/UNCTAD discourse on the subject need to be replaced with new concepts. Specifically, in considering competition policy from a developmental perspective, the paper reaches the following analytical conclusions: • emphasis should be placed on dynamic rather than static ...