The Role of (In)Formal Governance and Culture in a National Competition System: A Case of a Post-Socialist Economy

Abstract

Research increasingly suggests that the effectiveness of competition laws and policies could be enhanced if their implementation would be linked with a better understanding of the cultural influences on competition-related decisions. Moreover, the lack of competition culture has been considered one of the main barriers to the enforcement of competition rules. But the studies examining the interplay of competition policy and national culture appear to be rather limited.

To our knowledge, this is the first study, based on primary sources, focusing on the interaction of the competition system and national culture through the governance perspective of a European (post)transitional society. Our qualitative analysis is based on interviews with key actors of the Croatian competition system, looking at the period between 1995 and 2018. Our preliminary findings indicate several key features: first, a very strong influence of competition-related socialist legacy; second, collectivist culture and high power distance in the society (cultural dimensions that are not supportive of the development of the competition system) and third, a clash between the process of Europeanization and inherited collusion-friendly, (in)formal governance mechanisms.

The contribution of this article lies in the unique set of empirical evidence and the analysis of the relations between modes of governance, national culture and competition system development in a post-socialist society. Thus, this study is expected to have broader resonance for other post-transitional countries and less developed countries with similar features of the national culture.

Keywords: antitrust, competition law, competition culture, post-transition countries, trade associations, governance, Croatia

JEL Classification: K21, L40, L44, L50, O10, P30, P37