Estudios Palacios Lleras

Competition law and Development: The Missing Links


Since the 1990s the adoption of competition law regimes has been considered as part of creating favorable conditions for economic growth and development. For example, these regimes can prevent transnational firms with deep pockets from displacing smaller efficient firms, and can prevent state-owned enterprises from abusing their dominant positions. In doing so, these regimes enables the functioning of markets, makes them attractive to new investments and participants, and thus have a positive effect on growth and development – or so the argument goes.

This paper takes a closer look at the relationships between competition law and development present in the relevant literature about this topic. I argue that competition law regimes balance two competing views about development conditions, which are the promotion of market-based rivalry and fostering industrial productivity. This implies trade-offs; emphasizing market-based rivalry may foster aggressive competition, but may also prevent incumbents from investing in R&D activities, which are also conducive to development. Just as well, particular market arrangements that can be perceived as abusive or excessive can also be lawfully justified as the fair return to a risky decision. These considerations suggest that it is not clear that one view or the other is more conducive to development.

Two implications follow from this analysis: First, developing countries will reach different balances depending on their understanding of competition law. Second, the differences between regimes allow transnational firms to hedge their risks and change their patterns of investment in ways that may not benefit developing countries. By showing that the relationships between competition law and development are not straightforward, this paper will contribute to the field of competition law and development.

[i] Andrés Palacios Lleras, extraído de  “Competition law and Development: The Missing Links”, para el QUEEN MARY POSTGRADUATE LEGAL RESEARCH CONFERENCE 2013, Junio 6 de 2013,Centre for Commercial Law Studies (CCLS), Queen Mary, University of London, 67-69 Lincoln’s Inn Fields, London WC2A 3JB.
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