Adapting the Role of Economics in Competition Law: A Developing Country Dilemma

16 Pages Posted: 19 Apr 2014

See all articles by David J. Gerber

David J. Gerber

Chicago-Kent College of Law - Illinois Institute of Technology

Date Written: 2014

Abstract

Competition law officials and economic policy decision makers in developing countries often face a dilemma. They are often told by foreign advisers that they should adopt a form of competition law that relies on economics to provide the standard for competition law liability – i.e., the norms of the competition law system. An economics-based model (EBM) in which economics plays this role was developed in the US, and many components of it have been adopted in European competition law. This means that the most advanced competition law systems follow such a model to one degree or another, and this produces pressure on developing countries to follow them. Moreover, the accumulated experience in these older systems leads many to believe that all countries should follow this model. The image is usually that decision makers in the more developed systems have learned lessons from these experiences and that their systems are likely to be the “best” of these lessons.

Imagine, however, the disconnect and thus the dilemma for decision makers in many developing countries. In a small, African country, for example, decision makers may find the idea of using economics in competition law attractive in the abstract, not least because foreign advisers urge its importance. They are likely, however, to be unsure of how they can apply an EBM in their own competition law systems, where few resources may be available for competition law, where there is likely to be limited experience with either competition law or a modern market economy, and where there may be limited political support for enforcement of competition law. The obstacles to accepting and/or implementing an EBM in such a context are many. To copy such a model would mean adopting a concept of law that was developed elsewhere to deal with very different kinds of problems and with very different experiences, levels of resource availability and so on.

Central to the dilemma is the role of economics in competition law. On the one hand, the developing country decision maker is likely to recognize at least some of the potential benefits of using economics in competition law, not least because competition law deals with economic issues and economic conduct. On the other hand, however, s/he may have difficulty imagining the use of economics that is presented in the EBM. Moreover, it is likely to be difficult for her to expect that economics could be used in the same way in her country that it is used in the US or Europe.

Keywords: economics, competition law, economics-based model, EBM, development, developing countries, antitrust, international law, comparative law

JEL Classification: K20, K21, K29, K33, K39

Suggested Citation

Gerber, David J., Adapting the Role of Economics in Competition Law: A Developing Country Dilemma (2014). Available at SSRN: https://ssrn.com/abstract=2426359 or http://dx.doi.org/10.2139/ssrn.2426359

David J. Gerber (Contact Author)

Chicago-Kent College of Law - Illinois Institute of Technology ( email )

565 W. Adams St.
Chicago, IL 60661-3691
United States

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