How to and How Not to Introduce Competition Law and Policy in Transitional and Developing Economies

The paper first summarizes the benefits of competition, i.e. why competitive markets are more efficient than oligopolistic or monopolistic markets, and the threats to competitive markets from cartels, concentration, and government interference. In the main part, the paper presents the key components of effective competition oversight, in particular for countries seeking to reform their competition laws and agencies and those planning for the first time to introduce meaningful competition oversight. Finally, the paper advocates that transitional and developing countries should look to the European Union for the most advanced model of robust competition oversight and avoid costly and time consuming experiments with inferior alternatives. In an annex, the paper provides links to legislative materials of countries that have modernized their competition laws since 1990.