Competitive Market: Nitrous for Engine of Economic Growth

Abstract

Competition policy promotes economic growth in developing countries? Prior to addressing this issue, the question is what is competition policy? Broadly defined, competition policy encompasses any policy (including competition law) that promotes competition and facilitates efficient resource allocation. Therefore the major goal of competition policy is to promote and protect competitive processes in order to foster allocative, internal and dynamic efficiency. Hence, it could be said that "efficiency is the goal, competition is the process".

To address the question of whether competition policy promotes economic growth, this essay first presents some concerns of developing countries then discusses the impact of competition on efficiency and productivity and the importance of legal institutions for economic growth.

Section 2 address some of the concern developing countries have of the role of competition policy. Section 3 explores the relationship between competition policy and economic growth. Section 4 introduces a competition policy relevant to developing countries. Section 5 provides empirical evidence and concludes.

Keywords: Competition, Market, Competitiveness, Economic Growth, Developing Countries

JEL Classification: A00, K00, K20, K21, K29