The Economic Effects of Competition Policy: Cross-Country Evidence Using Four New Indicators

Abstract

This paper introduces a number of indicators on various aspects of competition laws and competition agencies in order to make competition policies comparable. It contains an indicator concerned with the objectives and the instruments of competition laws, a second indicator evaluating to what degree an economic - as opposed to a legal - approach to competition policy has been chosen. Based on the assumption that it is not the content of the law alone but also the structures erected in order to implement the law, it further presents an indicator reflecting the formal independence of competition agencies and a fourth one reflecting their factual independence. These four indicators are used to estimate the effects of competition policies on economic growth. It turns out that all four variables contribute to explaining differences in total factor productivity. Yet, their impact is not particularly robust to the inclusion of indicators for the general quality of institutions.

Keywords: Competition and Growth, Competition Policy, Independence of Competition Agencies, Delegation of Competence

JEL Classification: D40, H11, K21, L16, L40, O57