TRADE-RELATED AGENDA, DEVELOPMENT AND EQUITY (T.R.A.D.E.) WORKING PAPERS COMPETITION POLICY, DEVELOPMENT AND DEVELOPING COUNTRIES Ajit Singh, Professor of Economics, University of Cambridge, and Rahul Dhumale, Fellow, Judge Institute, University of Cambridge. SOUTH CENTRE NOVEMBER 1999 THE SOUTH CENTRE
In August 1995, the South Centre became a permanent intergovernmentalorganization of developing countries. In pursuing its objectives of promoting Southsolidarity, South-South co-operation, and coordinated participation by developingcountries in international forums, the South Centre has full intellectual independence. It prepares, publishes and distributes information, strategic analyses andrecommendations on international economic, social and political matters of concernto the South.
The South Centre enjoys support and co-operation from the governments of thecountries of the South and is in regular working contact with the Non-AlignedMovement and the Group of 77. Its studies and position papers are prepared bydrawing on the technical and intellectual capacities existing within South gov-ernments and institutions and among individuals of the South. Through workinggroup sessions and wide consultations which involve experts from different parts ofthe South, and sometimes from the North, common problems of the South arestudied and experience and knowledge are shared. CONTENTS Preface List of Abbreviations Foreword Summary I. WTO, Competition Policy and Development. II. The Global Merger Wave .
2.1 Competition policy implications for developing countries . III. Privatization, Deregulation and Competition Policy. IV. Competition Policies in Advanced Economies: A Model for Developing Countries? . V. Economic Theory, Competition Policy and Development. VI. Analytical Conclusions and Implications.
6.2 Implications for developing countries . Selected Bibliography.
The South Centre, with funding support from UNDP TCDC Unit, hasestablished a pilot project to monitor and analyse the work of WTO from theperspective of developing countries. Recognizing the limited human and financialresources available to the project, it focuses on selected issues in the WTO
identified by a number of developing countries as deserving priority attention. It
is hoped that the project will lead to more systematic and longer term activities bythe South Centre on WTO issues.
An important objective of the project is to respond, to the extent possible
within the limited resources, to the needs of developing country negotiators inthe WTO for concise and timely analytical inputs on selected key issues undernegotiation in that organization. The publication of analytical cum policy papersunder the T.R.A.D.E. working paper series is an attempt to achieve this objective. These working papers will comprise brief analyses of chosen topics from theperspective of developing countries rather than exhaustive treatises on each andevery aspect of the issue.
It is hoped that the T.R.A.D.E. working paper series will be found useful
by developing country officials involved in WTO discussions and negotiations, inGeneva as well as in the capitals.
The text of these working papers may be reproduced without prior
permission. However, clear indication of the South Centre’s copyright isrequired. LIST OF ABBREVIATIONS
Ministry of International Trade and Industry (Japan)
Organization for Economic Co-operation and Development
Technical Co-operation among Developing Countries
Trade-related Aspects of Intellectual Property Rights
United Nations Conference on Trade and Development
Competition policy has emerged as a major issue on the global trade agenda due to thepressure by major developed countries who consider that in an increasingly liberalizedworld economy the issue of competition should be addressed at the international level andappropriate agreements and rules be negotiated.
This, however, is hardly a new matter on the international agenda. Indeed, the
subject has been dealt with in the UN at least since 1964 when UNCTAD was established. Such issues as restrictive business practices and a code of conduct for transnationalcorporations have been studied in depth and discussed by member states for decades witha view to adopting international instruments on these matters. The broad objective was toelaborate an international framework that would regulate the practices and check the
power of large corporations, such that their actions and presence in the South would bemore supportive of national development efforts.
This earlier emphasis has been largely forgotten. Today concern is focused more on
how to promote globally the goals and objectives of major corporations from the North. And whereas in the earlier period the developed countries were at best ready to discussvoluntary codes of conduct, now when the onus is on developing countries to adapt theirnational policies to the needs of others, international agreements pressed for by the Northare supposed to be binding and enforced by multilateral disciplines. This fundamental shiftis but one reflection of the lopsided power relations between the North and the South.
As in other areas of international trade and trade related matters, the advanced
industrial countries are seeking what they refer to as “level playing fields”, so that theircorporations can have free and open access to developing countries. The firms in the lattercountries, however, are relatively small with relatively little experience and, unlike the largeestablished foreign firms with a world-wide presence, do not have the same access tofinance and lack the less tangible but critical assets such as brand recognition or globalmarketing networks. The establishment of “level playing fields” would prohibitdeveloping countries both from taking measures to shield their firms and industries fromcompetition from massive foreign corporations and from pursuing measures to promotethe growth of strong domestic corporations.
Much as in the case of the OECD proposal for a Multilateral Agreement on
Investment (MAI), which it was hoped would be extended to embrace developingcountries but which was aborted in the OECD, discussions on competition policy givelittle consideration to the specificities and differences in levels of development amongcountries of the South, and among developed and developing countries.
The global strategies and expansion of major corporations are beginning to have a
marked influence on the nature of competition in the world market. The recent spate of
mega mergers and acquisitions mainly among larger corporations based in the North isincreasing the degree of market concentration and hence raises serious questions
concerning the nature of global competition. Such trends are making it even more difficultfor developing countries and their firms to exist as economically autonomous entities inthe world economy.
TNCs drive many of the major policy initiatives of developed countries in the world
arena, including those intended to put in place new global regimes to regulate the worldeconomy and national economies of the developing countries. But although they arepowerful actors on the global scene, TNCs themselves are not considered to have dutiesand obligations and are kept beyond the jurisdiction of the international community, asopposition from the North prevents issues regarding TNCs from featuring on theinternational economic and development agendas.
This working paper attempts to shed some light on the inadequacies of the
approaches to competition policy advocated by the North, and which are reflected inWTO and increasingly in the UN as well. The paper illustrates that in-depth academicanalysis of the subject of competition policy, when taking into account developmentpriorities and analysing the situation in an integrated and balanced manner, arrives at a setof policy conclusions and approaches which differ substantially from those currently
This analysis provides yet one more example of the vital importance for developing
countries of overcoming dependence on North-based studies and analyses, and oforganizing their own analyses with a view to preparing their views and positions ininternational debates and negotiations such as those taking place in WTO.
This paper provides a briefing for developing countries to apprise them of the main issueswhich are relevant for development and social welfare in relation to the present andprospective discussions on competition policy in the WTO, UNCTAD, OECD and otherfora. Although this is the immediate backdrop for an examination of competition policy inrelation to economic development, the topic is urgent and important in its own right,because of important new developments in the world economy and because of significantstructural changes within developing countries themselves.
The main analytical conclusions for developing countries which emerge from the
theoretical and empirical analysis of competition policy and economic development in this
1) It is important for developing countries to have a competition policy which
is designed to take appropriate account of their level of development and thelong term objective of sustained economic growth. This is in part due to thepotential effects of the international merger movement and also because ofprivatization, deregulation and liberalization which have occurred in thedomestic economies of most developing countries.
2) A distinction is made in this analysis, between, on the one hand, countries at
low levels of development and with meagre institutional capacity and, on theother, semi-industrial countries with greater institutional capabilities. Thepaper concludes that the types of competition policies adopted by the USand the UK are not appropriate for either group of developing countries.
3) If the concerns of developing countries with respect to competition policy
are to be addressed seriously, this paper suggests that the concepts used inthe current WTO/OECD/UNCTAD discourse on the subject need to bereplaced with new concepts. Specifically, in considering competition policyfrom a developmental perspective, the paper reaches the following analyticalconclusions:
• emphasis should be placed on dynamic rather than static efficiency as
the main objective of competition policy for developing countries;
• there should be a concept of ‘optimal degree of competition’ (rather
than of maximum competition) to promote long term growth ofproductivity;
• there should be a related concept of ‘optimal combination of
competition and co-operation’ between firms so that developingcountries can achieve fast long term economic growth;
• the critical need to maintain the private sector’s propensity to invest at
high levels requires a steady growth of profits; for this to occur there is
need for government co-ordination of investment decisions which inturn requires close co-operation between government and business;
• there should be recognition of the concept of ‘simulated competition’,
which involves contests among those seeking state support and whichcan be as powerful as real market competition;
• there should be recognition of the importance for developing countries
of industrial policy and hence the need for coherence betweenindustrial and competition policies.
However, the paper suggests that the concepts or principles outlined above appear ‘new’only in relation to the current discussions on competition policy and economicdevelopment in the international agencies mentioned earlier. These concepts are fullygrounded in modern economic analysis and a number of them are in fact implicit in WTOAgreements themselves but in which they have in fact been used to the advantage ofdeveloped countries. It is argued here that these same principles are also crucial forcompetition policy in developing countries in order to promote their economicdevelopment.
For developing countries, the paper recommends they should institute domestic
competition policies suited to their stage of development.
The paper also recommends the establishment of an international competition
authority, to prevent restrictive business practices and competition-reducing actions oflarge multinationals which are acquiring even greater market power as a consequence ofthe current huge wave of mergers and takeovers, both national and international. I. WTO, COMPETITION POLICY AND DEVELOPMENT
The Declaration of the WTO Ministerial Conference held in Singapore in December 1996stated in paragraph 20:
… establish a working group to study issues raised by Members relating tothe interaction between trade and competition policy, including anti-competitive practices, in order to identify any areas that may merit furtherconsideration in the WTO framework.
In the conduct of the work of the working group[s], we encouragecooperation … to make the best use of available resources and to ensure
that the development dimension is taken fully into account. … It is clearly
understood that future negotiations, if any, regarding multilateral disciplinesin these areas, will take place only after an explicit consensus decision istaken among WTO Members regarding such negotiations.”1
The General Council of the WTO established a Working Group in April 1997 on theInteraction Between Trade and Competition Policy under the chairmanship of ProfessorFrédéric Jenny, a French expert on industrial organization. The non-paper by the chair,“Checklist of Issues Suggested for Study”, called for particular attention to the“development dimension” in the Working Group’s discussion on these issues: “It waswidely recognised that the Working Group’s work programme should be open, non-prejudicial and capable of evolution as the work proceeds. It was also emphasized that allelements should be permeated by the development dimension.”2
Although the WTO Working Group has made notable progress on its mandate, and
there has been much useful work carried out at UNCTAD and other fora, it is, to put itmildly, rather anomalous that it is precisely the developmental dimension which is missingfrom the interim documentation released by the international agencies.3 A serious policyanalysis of competition policy and economic development, it will be argued here, requiresfresh concepts and new definitions. An analysis of these issues, which are of vitalimportance to developing countries, within the traditional WTO framework will be highlyprejudicial to the South’s development needs.
The order of discussion of the various topics in this paper and the construction of
1 The full text of paragraph 20 of the Singapore Ministerial Declaration (INT/MIN(96)/DEC) is contained
in Annex I of WTO (1999). 2 WTO (1998) Annex I, p.51. 3 WTO (1999). The final report of the WTO working group not only provides information on the activities
of this group itself but also reports on the work which has been carried out in relation to competition policy
for developing countries at UNCTAD, OECD, and the World Bank. South Centre T.R.A.D.E. Working Papers
Firstly, it is suggested here that although many developing countries may not have
needed a competition policy4 before, most require it today, regardless of whether or notthe subject is discussed at the next or future WTO ministerial meetings. This is in part dueto the potential welfare-reducing effects of the current merger wave that is sweeping theworld economy. Further significant structural changes within developing countriesthemselves also underline the need for competition policy.
Secondly, it is argued that many developing countries cannot aspire to have the kind
of competition policies which advanced countries implement. More importantly it issuggested that it is not, in any case, in the interest of developing countries to do so. Competition policies for advanced countries are shown not to be appropriate for the stageof development of most developing countries.
Thirdly, the paper outlines the kind of competition policies which would best serve
the interests of developing countries. Policies will be required both at the national and theinternational level. It will be suggested that the formulation of national competitionpolicies in developing countries requires rather different economic concepts than thosewhich are normally applied in advanced countries.
Fourthly, it will be argued that these new economic concepts are thoroughly
grounded in modern economic analysis as well as being supported by a large body ofempirical evidence. It will however be suggested that many of these concepts are “new”only in relation to the current studies and discussions on the subject at WTO, UNCTADand other international fora; indeed some of them are implicit in the existing WTOAgreements.
Finally, the paper sets out the implications of the above analysis for developing
4 For the purpose of this paper, competition policy is defined as a body of laws, administrative rules and
case law which are employed to deter restrictive business practices so as to maintain fair competition.
Competition policy also includes rules and regulations governing mergers and acquisitions. Competition Policy, Development and Developing Countries 3II. THE GLOBAL MERGER WAVE
One of the most important reasons why some kind of competition policy for developingcountries has become imperative is the gigantic merger wave which has gripped the worldeconomy in the 1990s. As the chart below shows, between 1990 and 1998 the value ofworldwide mergers and acquisitions rose nearly fivefold. Most of this merger activity tookplace within the US. Data reported in the Financial Times (FT, October 25, 1999) and notreproduced here suggests that of the total worldwide merger activity of nearly $2.5 trillion,almost $1.6 trillion represented takeovers and mergers within the United States; much ofthe remaining activity occurred in other industrial countries. W o r l d w i d e M e r g e r s a n d A c q u i s i t i o n s Value (Trillion $)
Source: Economist, January 1999.
A significant characteristic of the present merger wave is the large incidence of cross
border takeovers and mergers. This type of merger activity has become progressivelyimportant with the increasing integration of the world financial markets over the last twodecades.5 However, most of the cross border amalgamations also take place among theindustrial countries themselves. Nevertheless, during this decade, a considerableproportion of foreign direct investment (FDI) by industrial country firms in developingcountries has taken the form of acquisition of existing enterprises rather than green fieldinvestment. UNCTAD (1999) data suggests that if China (which among developingcountries has not only been the largest recipient of FDI, but most of this investment hasalso been green field) is excluded, the share of mergers and acquisitions in the accumulatedFDI rises from 22 per cent during 1988 to 1991 to an average of 72 per cent in the time
5 For comparison with previous merger waves, see the discussion in Singh, 1993; Hughes, 1992 and Hughes
South Centre T.R.A.D.E. Working Papers
Periodic waves of mergers have been an integral part of the capitalist development
since its inception.6 Mergers and acquisitions represent an important mechanism forreorganization and restructuring of a market economy.7 Many of the leading corporationsin the world today are the products of mergers affected in previous merger waves. Economic theory suggests that mergers can have both positive and negative effects onwelfare. At the simplest level, the former may take the form of synergy among theamalgamating firms, and/or economies of scale which improve efficiency and reduce costsof production; the latter may arise from increased monopoly power of the merged firmswhich may be welfare reducing.8
Both in the US and UK one of the most important and the largest merger
movements occurred a hundred years ago, during the 1890s. Although rigorous empiricalwork has not yet been done on the subject, back-of-the-envelope calculations suggest thatthe merger boom of the 1990s, taking into account the effects of factors such as thegrowth in the size of the economy and the rate of inflation may be the biggest everrecorded notably in the US.9 This wave has already resulted in increased concentration in awide range of industries including aerospace, defence equipment, power equipment, homemachinery, automobile and automobile components, pharmaceuticals, soft drinks, snack
foods, chemical fertilizers, retailing, accountancy and financial services (Nolan,1998).10
The merger boom of the 1990s is of course not entirely an exogenous or
autonomous event. As indicated earlier, it is in part caused by liberalization andglobalization, closer integration of world markets through finance and trade, and thecreation of the European single market, among other factors. Firms are jockeying forstrategic advantages in the new environment through mergers, acquisitions, and otherkinds of tie-ups.11 However, once some large takeovers have occurred in a particularindustry, this creates an oligopolistic disequilibrium in the sense that the market shares ofleading firms are disturbed. As a consequence, other giants are obliged to follow in orderto maintain their share in the world market. In this sense, evidence suggests many mergersin the present wave are defensive, but that does not stop their overall effect in a numberof cases from being welfare-reducing due to potential reduction in competition as outlinedabove.
6 Evidence suggests that mergers are not randomly distributed over time but occur in waves. See, for
example, Golbe and White, 1988. 7 For the differences between mergers and acquisitions (or takeovers) and their implications, see Singh,
1971. 8 It is important, however, to remember that not all mergers necessarily lead to increased monopoly power;
even when they do, they are not always welfare reducing. Some of these points will be elaborated in the
following sections. (See further Scherer and Ross, 1992; Singh, 1992a, 1992b). 9 For an analysis of the relative magnitude of previous merger waves, see Golbe and White, 1988; Singh,
1993; Hughes and Singh, 1980. 10 The above discussion has been concerned only with mergers, but other kinds of tie-ups and co-operative
arrangements between firms can have similar anti-competitive effects. Often a case-by-case investigation is
needed to determine the size of such effects. However, the observations in footnote 8 remain relevant. 11 Co-operation between firms can take various form with mergers and acquisitions representing one end of
the spectrum in which two or more firms are amalgamated together into a single legal entity. Other kinds of
inter-firm co-operation may involve joint ventures, technology sharing agreements, and outright cartels.
Some forms of co-operation may be benign, e.g., technology sharing, while others (e.g. cartels) are not, and
may reduce social welfare more than full scale mergers between firms. Competition Policy, Development and Developing Countries 52.1 Competition policy implications for developing countries
Whether the mergers take place in the US or Europe or through cross border takeovers indeveloping countries themselves, there are serious competition policy concerns fordeveloping countries. If the largest producers in, say, the US automobile industry merge,this may not only lead to anti-competitive behaviour in the US but also similar or worsebehaviour in developing countries (e.g. cartelization of markets, increased barriers toentry). The US has long had a competition policy which provides it with a defence againstsuch welfare-reducing consequences of mergers.
In the famous example of the Boeing-McDonnell Douglas takeover case, although
both companies were located in the US, the European Community objected to the mergeron account of its potentially competition-reducing effects in Europe.12 The Communitywas able to extract important concessions from Boeing before the merger was approved. It is also now commonplace for jurisdictions in other industrial countries to scrutinizeseparately all large proposed mergers for their effects on competition even if they occurabroad.13
Leaving aside perhaps China, India, Brazil, and the small number of relatively
advanced newly industrializing countries (NICs), the vast majority of developing countrieswill find it difficult to stop anti-competitive behaviour by the local subsidiaries of merginglarge corporations in industrial countries. These corporations may behave competitivelywithin industrial countries because of the effective competition regulations of the latter butmay indulge in anti-competitive practices in developing countries. A Ghana or a Tanzaniais likely to find it difficult to prove, let alone punish, predation or collusive pricing by largeindustrial country corporations.
Recently, US anti-trust authorities imposed a fine of US$700 million on the leading
European producers of vitamins for creating a cartel to charge high prices to consumers. If such cartels can operate in the US with all its regulatory machinery and its extra-territorial reach, the task of adequately policing such abuses is likely to be beyond thecapacity of most developing countries’ competition authorities. These considerationssuggest that the huge current international merger movement, even though it is largelyoccurring in advanced countries, has potentially serious adverse implications fordeveloping countries. Therefore, the latter not only need competition policies in their owncountries but also international and South-South co-operation. They need to involve theinternational community in co-operative action against potentially anti-competitivepractices of the mammoth corporations which are emerging in industrial countries as aconsequence of the current merger wave. 2.2 Level playing fields
The analysis of the international merger wave also suggests another area of concern for themore advanced developing countries. This relates to the question of unequal competition
between large multinational and big domestic corporations in these countries. Even thelargest developing country corporations tend to be much smaller than the industrial
12 See further Khemani, 1998; WTO, 1997. 13 See further Jenny, 1999 and Fox, 1999. South Centre T.R.A.D.E. Working Papers
country multinationals. The large merger wave of the 1990s is likely to make this disparityeven bigger. By means of worldwide mergers and tie-ups, the advanced countrycorporations are able to integrate their international operations. This may be a source ofgenuine technical economies of scale, but evidence indicates that in most industriesaverage cost curves are L-shaped, that is to say, after a threshold size which is relativelysmall and which most of these giant corporations would already have achieved even beforemergers, costs do not fall as the size of the firm increases. The economies whichnevertheless the multinationals are able to achieve through integration are those relating tobulk buying of inputs, reduced cost of capital due to large size as well as economiesachieved in advertising and other marketing activities on a large scale. To the extent thatthese economies depend on the market power of the multinational in relation to inputs,the cost saving measures are not necessarily welfare enhancing; furthermore, these“pecuniary economies” create barriers to entry which make the markets less contestable.14
During the last 50 years, Japan, as well as many NICs in Asia and Latin America,
have been able to foster the development of big businesses to the advantage of thesecountries’ overall economic development. This has usually been achieved through variouskinds of state support. These large domestic corporations, which are privately owned, have
often been the leaders in the diffusion of new technologies and the adaptation of importedtechnologies to domestic circumstances.15 However, in the current, new internationaleconomic environment these firms are likely to be handicapped in three significant ways:
1) through the limiting of state aid as part of WTO disciplines;
2) through the increased size and market power both in the
product and input markets of large multinationals;
3) through increased barriers to entry and contestability which the merger
In these circumstances, it will be much more difficult than before for large developingcountry corporations to become even national let alone international players.
It is normal for multinationals to complain that there is not a level playing field
between themselves and national corporations which are government supported; hence,the multinationals’ demand for “national treatment”. However, the actual situation isoften quite the opposite: the playing fields are tilted in favour of multinationals whoinvariably have considerable market power. Liberalization and globalization, together withthe international merger movement, are making these fields more unequal even from theperspective of large developing country corporations.
14 For a comprehensive discussion of the economies of scale and of scope, and of multiplant economies of
scale, see Scherer and Ross, 1990. 15 See further Amsden, 1989 and Singh, 1995a. Competition Policy, Development and Developing Countries 7III. PRIVATIZATION, DEREGULATION AND COMPETITION POLICY
Many of the same ideological, political, and economic forces of liberalization andglobalization which have led to the current gigantic merger wave in the industrial countrieshave also been responsible for fundamental changes in the organization of economicactivity in developing countries around the world. In the 1980s, and particularly during the1990s, many developing countries have been undergoing far reaching market orientedreforms leading to considerable diminution in the direct role of the state in economicactivity. This has resulted in widespread privatization, deregulation, and internal andexternal financial liberalization.
The timing and extent of these liberalization measures has varied between countries.
In relation, specifically to privatization, the pattern was set by the programme ofprivatization of larger state-owned enterprises (SOEs) beginning in the 1980s in the UKunder the conservative government led by Mrs. Thatcher. This was followed not only bymany advanced countries, but also by the vast majority developing countries. Leaving aside
transition economies where there has been mass privatization, the leading developing
countries each with privatization proceeds worth more than US$1 billion between 1990-1997 were Argentina (proceeds of $27.9 billion), Brazil ($34.3 billion), Colombia ($5billion), India ($7.1 billion), Indonesia ($5.2 billion), Malaysia ($10 billion), Mexico ($30.5billion), Pakistan ($2 billion), Peru ($7.5 billion), Singapore ($1.9 billion), South Africa ($2.5billion), Turkey ($3.6 billion), Thailand ($3.6 billion), and Venezuela ($5.9 billion).16
Considerable privatization also took place in African countries. However, in view of
the smaller size of their economies and their lower level of development, in absolute termsthe proceeds from privatization during the same period were substantially lower for thesecountries, other than South Africa. Nevertheless, privatization proceeds amounted to US$864 million in Ghana, $227 million in Kenya, $197 million in Zimbabwe, $140 million inTanzania, $730 million in Nigeria, and $412 million in Zambia. In general, according toWDR (1999), the lower the level of per capita income, the lower the extent ofprivatization.
Privatization was ostensibly undertaken for a number of reasons including improving
economic efficiency, reducing the drain on government resources caused by public sectorlosses, raising revenues for the government and to help pay off the foreign debt by raisingforeign exchange through the sale of public assets to foreign multinationals. In mostdeveloping countries, privatizations were strongly encouraged if not required understructural adjustment programmes of the international financial institutions. It is generallyrecognized that, rather than efficiency reasons, the main motive for privatization in manycountries was to achieve a relaxation of the hard budget constraints which theinternational financial institutions enforced as part of their conditionality. There havebeen few studies of the effects of privatization on economic efficiency in developingcountries. However, a number of studies have been carried out for developed countries,particularly the UK, which indicate that it is not ownership per se which is the main
determinant of economic performance, but rather the degree of competition in themarket.
16 World Development Indicators, (1999)
South Centre T.R.A.D.E. Working Papers
In this overall context, it is not difficult to see why the need for competition policy
becomes crucial. Further, many of the privatized companies were natural monopoliesunder state ownership. Privatizing them does not necessarily lead to greater social welfaresince it simply involves replacing the public monopoly with a private one. The former mayin fact be preferable to the latter from a social welfare perspective, as there may be someconsideration given to the public purpose in the former’s activities. The presence of a largestate sector is probably an important reason why many developing countries have not untilnow felt it necessary to have a competition policy. However, in the new privatizeddomestic economic environment, competition and regulatory policies become essential. Moreover, as Stiglitz points out, external liberalization cannot substitute for a competitionpolicy if liberalized imports and exports become subject to domestic monopolisticrestrictions (Stiglitz, 1999).
Khemani calls attention to another aspect of privatization via foreign takeovers
which affects many developing countries. He reports cases where foreign acquiring firms,normally multinational enterprises, demand that governments erect barriers to entry orpermit certain pricing practices. He notes: “Often developing and emerging market
economies facing hard budget constraints or rising deficits, and/or are in desperate needof foreign investment, may have no choice but to cave in to such demands” (Khemani,1999 p.105). Competition Policy, Development and Developing Countries 9IV. COMPETITION POLICIES IN ADVANCED ECONOMIES: A MODEL FOR DEVELOPING COUNTRIES?
The argument so far has suggested that the new internal and external environment facingdeveloping countries makes it necessary for them to have competition policies. Theimportant question, and the one which is central to this paper, is what kind of policieswould be appropriate for developing countries. Should developing countries simply followthe advanced countries in their competition policies and enact legislation accordingly? Toanswer this question it is necessary first to consider what kind of competition policy theadvanced countries follow. Here, the significant point is that there are major differencesamong them in the policies that they pursue, their underlying philosophies, their legislativepractices, and their modes of implementation.17
The US which has long experience in competition policy -- the first US legislation
was passed nearly a hundred years ago in response to the merger movement at the turn ofthe 19th century (referred to earlier) -- takes a so-called structural approach to this issue. Competition is regarded as being a good thing in itself and anti-trust laws (includingFederal Trade Commission (FTC) rulings and Supreme Court judgements) attempt todiscourage anti-competitive practices. The spirit of this view is well captured in theepigram: the purpose of competition policy is to advance the competitive process ratherthan to protect the competitors. The WTO report notes, “A guiding principle that is oftenreferred to by competition agencies and tribunals or courts is that ‘competition lawprotects competition, not competitors’ ” (WTO, 1997, p. 44).
Competition policy in the UK and in Western Europe has traditionally been based
on a rather different philosophy. It does not regard competition as an end in itself, but ameans to an end. This leads to a trade-off approach -- encroachments on competition areacceptable if they are adequately counterbalanced by benefits to the community. Thus, inthe simplest case, mergers between two large firms in the same industry -- which by thetraditional US anti-trust policy would be ruled out per se -- may be permitted undertraditional UK competition laws, if it can be shown that the welfare reducing effect ofincreased market power resulting from the merger is more than matched by gains tosociety, as a consequence of reduced costs of production because of economies of scaleand/or because of synergy.
This leads in practice to a case-by-case approach to mergers rather than the
promulgation of per se structural rules as has historically been the case in the US. Singh(1993) has noted that there has been some convergence of competition policies in the USand the UK in the 1980s and the 1990s. The US authorities, partly due to increasedinternational competition, started to give greater importance to the so-called “economies
of scale defense” for mergers than they used to do before. Regulators in the UK, on theother hand, have started giving much greater weight to the effects of mergers or of other
17 For a fuller discussion of competition policy in advanced countries see Scherer, 1994; Hughes, 1992;
Waverman, 1995; Amsden and Singh, 1994. For the section on competition policy in Japan, this paper draws
10 South Centre T.R.A.D.E. Working Papers
kinds of corporate behaviour on competition per se than to other considerations (such asregional impact) in the calculation of net social gain.
Among industrial countries, Japan has its own approach to competition policy
questions. Following the end of World War II, the US occupation authorities in Japan
enacted US type anti-trust laws in part to punish the large Japanese firms -- the zaibatsu --who were thought to have been responsible for aiding and abetting Japan’s aggression andwar effort. However, as Professors Richard Caves of Harvard University and ProfessorUekusa of Tokyo University, leading students of Japanese industrial organization, pointout, the US-imposed laws had no domestic constituency in the country.18 The lawstherefore soon fell into disuse for this as well as other strategic cold war-relatedconsiderations. Although the zaibatsu disbanded, they soon re-emerged in the form of alooser association of companies called keiretsu. Moreover, competition policy in Japanbecame subservient to the country’s vigorous industrial policy. Professor Okimotoexplains the philosophy behind the Japanese approach to the subject:
“…the Japanese government takes a more pragmatic approach to anti-trustenforcement, one that makes allowances for national goals such as
industrial catch-up. It takes into account other collective values and
extenuating circumstances in weighing enforcement decisions against theletter and spirit of anti-trust laws. Included here are such considerations aseconomies of scale, enhanced efficiency, optimal use of scarce resources,international competitiveness, heightened productivity, business cyclestabilization, industrial orderliness, price stabilization and economicsecurity” (Okimoto, 1989, p. 12-13).
Competition policy in Japan has thus evolved over time, as indeed has industrial policy.19This has been particularly true since Japan joined the OECD and began to implementtrade and financial liberalization measures. The evolution of Japanese competition policy inthe 1970s and the 1980s is interesting but not as relevant to developing countries as thecompetition policy practised by Japan between 1950 and 1973. This is because, at thebeginning of the period, Japan was very much like a developing country with low levels ofindustrialization and economic development. Indeed, its industrialization prospects at thetime were thought to be altogether precarious.20 How Japan, starting from such low levels,caught up with the West is clearly a story of great interest to developing countries. As seenbelow, the theory and practice of competition policy during the Japanese catch-up processin the 1950s and 1960s is particularly instructive for such economies.
To sum up, this brief review of the different approaches to competition policy in the
US, UK and Japan suggests that the most appropriate model from the perspective ofeconomic development may be that of Japan during 1950-1973. This period will thereforebe examined more closely below.
18 Caves and Uekusa, 1976. 19 See Singh, 1998; Tsuru, 1993; Johnson, Tyson et al. 1989. 20 World Bank, 1991. Competition Policy, Development and Developing Countries 11V. ECONOMIC THEORY, COMPETITION POLICY AND DEVELOPMENT
Before moving to the discussion of Japan’s competition policy in the period 1950-1973, itis useful to consider what insights are provided by economic theory to the question ofcompetition policies for countries at different levels of development.
Recent advances in economic theory, particularly agency theory, transaction cost
theory, and information theory, have greatly enriched our understanding of howcompetition and competition policy may work in various spheres of an economy and indifferent economies. Thus, a leading authority on the theory of industrial organization hasrecently observed:
“Competition is an unambiguously good thing in the first-best world ofeconomists. That world assumes large numbers of participants in all
markets, no public goods, no externalities, no information asymmetries, no
natural monopolies, complete markets, fully rational economic agents, abenevolent court system to enforce contracts, and a benevolentgovernment providing lump sum transfers to achieve any desirableredistribution. Because developing countries are so far from this ideal world, it is notalways the case that competition should be encouraged in these countries” (italicsadded) (Laffont, 1998, p.237).
This author provides a number of examples to support his contention. All of these involvewhat economists call the theory of the “second best.” The latter asserts that, if any one ofthe assumptions required for the validity of the fundamental theorems of welfareeconomics cannot be met, restricted rather than unrestricted competition may be asuperior strategy. Laffont draws particular attention to the “demonization” by manyeconomists (including those at the World Bank) of cross subsidization of different groupsby large public utilities. However, he points out that in developing countries, where, inpractice, taxes cannot be collected from the wealthy for re-distribution, it may be a goodstrategy for the government to require public utilities in these countries to subsidize poorconsumers in the countryside at the expense of richer residents in the city.
Laffont suggests that even if competition policy of the kind followed by advanced
countries such as the US or the UK were appropriate for poor African countries, they area long way from having the institutional capacity to implement such policies. Theimplementation of a comprehensive competition policy requires a strong state which manydeveloping countries at low levels of industrialization do not have. Therefore, at the veryleast, for such countries there will need to be far fewer and simpler competition ruleswhich are capable of being enforced. Clearly it would be unfair, if not absurd, to subject aSierra Leone to the same competition policy disciplines as the US.
We now turn to the consideration of the case of the semi-industrial countries, many
of which are now fairly advanced in industrial development, e.g., Korea, India, Brazil,Mexico. These countries have reasonably strong states with competent government
machinery. However, economic theory suggests that, even for these economies, the US
12 South Centre T.R.A.D.E. Working Papers
and UK types of competition policies may be inappropriate. A very important reason forthis conclusion is that the essential focus of competition policy in advanced countries suchas the US is the promotion of allocative efficiency and reduced prices for consumers(WTO, 1997). However, from the standpoint of economic development, this perspectiveis too narrow and static. In order to raise their people’s standard of living, a centralobjective of developing countries must necessarily be the promotion of long term growthof productivity. The pursuit of this objective of dynamic rather than static efficiencyrequires, among other things, high rates of investment. In a private enterprise economy,this necessitates encouragement of entrepreneurs’ propensity to invest. However, theprivate sector’s ‘animal spirits’ are likely to be dampened if, as a result of competition,profits became too low, even if only temporarily.
This suggests that unfettered competition may not be appropriate for a developing
economy. Economic theory as well as experience indicate that, in the real world ofincomplete and missing markets, unfettered competition may lead to price wars andruinous rivalry and therefore may be inimical to future investment: from this perspective,too much competition can be as harmful as too little. What is required by developingeconomies is an optimal degree of competition which would entail sufficient rivalry to
reduce inefficiency in the corporate use of resources at the microeconomic level, but notso much competition that it would deter the propensity to invest. This central analyticalpoint is altogether ignored in competition policy discourse in countries such as the USwhere the concept of optimal degree of competition is simply assumed to be maximumcompetition, that is, the more competition the better.21
It is useful in this context to reflect on the operation of competition policy in Japan
in the period 1950-1973. The Japanese economy achieved historically unprecedentedgrowth during this time span: its manufacturing production rose at a phenomenal rate ofabout 13 per cent a year, GDP at 10 per cent a year, and its share in world exports ofmanufacture rose by a huge 10 percentage points (Singh, 1998). A central role in thisspectacular economic advance was played by the very high rates of savings and investmentin the Japanese economy. As noted earlier, the competition policy was subordinated toindustrial policy, an essential concern of which was to maintain the private sector’s highpropensity to invest. For this purpose, the Japanese government’s Ministry ofInternational Trade and Industry (MITI) frequently imposed restrictions on productmarket competition. Amsden and Singh (1994) note: “It (MITI) encouraged a variety ofcartel arrangements in a wide range of industries -- export and import cartels, cartels tocombat depression or excessive competition, rationalization cartels, etc. … . Similarly,believing that large scale enterprises were required for promotion of technical change andfor Japanese firms to compete effectively with their western counterparts, MITIencouraged mergers between leading firms in key industries” (Amsden and Singh, 1994, p. 944).
The Korean government broadly followed the Japanese strategy of economic
development. It also had a strong industrial policy which, as in the case of Japan,
dominated competition policy. The government helped create the mammothcorporations, the chaebol, which went on to capture world markets. Korea wasunequivocally an industrially backward country in the 1950s. Its per capita manufacturing
21 See earlier discussion of philosophy of US competition policy which finds virtue in competition itself
Competition Policy, Development and Developing Countries 13
output in 1955 was US$ 8 compared to US$ 7 in India and US$ 56 in Mexico. During thelast four decades Korea has managed to transform itself into an industrial andtechnologically sophisticated economy. It is the world’s leading country in electronicmemory chip (DRAM) technology. Until the recent financial crisis, it was expected tobecome the fourth largest producer of automobiles in the world by the year 2000.
As a result of lax enforcement of competition policy, Korea has one of the highest
levels of industrial concentration in the world. However, the giant conglomeratescompete with each other fiercely. A significant part of the competition has been of thenon-market variety in which the chaebol have competed for government support. Thelatter has been given in return for meeting specified performance targets for exports, newproduct development, and technological change. In the market place, the chaebol competedfor market share, as that determined their subsequent investment allocations in a particularindustry. As in Japan between 1950-1973, the Korean government until recently haspurposefully co-ordinated industrial investments by competing chaebol, so as to preventovercapacity and too much competition (Chang, 1994).
The policies adopted by these East Asian countries find endorsement in the new
developments in economic theory. Essentially, modern economic theory suggests that
dynamic efficiency is best promoted by a combination of co-operation and competitionbetween firms rather than by maximum or unfettered competition(Graham andRichardson, 1997).
It has been suggested by some scholars and high US government officials that the
recent financial crisis in Asia demonstrates the failure of state-directed capitalism of theAsian countries. However, a careful analysis of these issues indicates that the crisis wascaused not by too much state direction but rather by too little. Overinvestment by thechaebol in Korea or the property bubble in Thailand were caused essentially by the fact thatthese countries were pursuing capital account liberalization in the immediate period beforethe crisis. Korea had become a member of the OECD in the early 1990s and in fact hadabolished its planning agency. Neither industrial overinvestment by the chaebol norexcessive investment in the property sector in Thailand would have occurred had thegovernments co-ordinated investment activity as before.22
22 For various interpretations of the Asian financial crisis see Singh, 1998b, 1999a; Singh and Weisse, 1999;
Radelet and Sachs, 1998; US Council of Economic Advisors, 1999; IMF, 1998; World Bank, 1999. 14 South Centre T.R.A.D.E. Working PapersVI. ANALYTICAL CONCLUSIONS AND IMPLICATIONS 6.1 Analytical conclusions
The main analytical conclusions for developing countries which emerge from thetheoretical and empirical analysis of competition policy and economic development, aswell as from the earlier discussion of the new developments in the international economyand their implications for competition policy, may be summarized as follows:
1) Developing countries do need a competition policy in the wake of the
international merger movement as well as because of privatization,deregulation and liberalization which have occurred in their domesticeconomies.
2) In examining this issue, a distinction was made between countries at low
levels of development and with meagre institutional capacity and semi-industrial countries with greater institutional capabilities. In neither case werethe US and UK types of competition policy found to be appropriate.
3) To address seriously the concerns of developing countries with respect to
competition policy, this paper has suggested new economic concepts in placeof those used in the current WTO discourse on the subject. Specifically, thepaper has called attention to the following points:
• the need to emphasize dynamic rather than static efficiency as the main
purpose of competition policy from the perspective of economicdevelopment;
• the concept of ‘optimal degree of competition’ (as opposed to
maximum competition) to promote long term growth of productivity;
• the related concept of optimal combination of competition and co-
operation to achieve fast long term economic growth;
• the critical significance of maintaining the private sector’s propensity to
invest at high levels and hence the need for a steady growth of profits;the latter in turn necessitates government co-ordination of investmentdecisions so as to prevent over-capacity and falling profits;
• the concept of simulated competition, i.e., contests, for state support
which can be as powerful as real market competition;
• the crucial importance of industrial policy to achieve the structural
changes required for economic development; this in turn requirescoherence between industrial and competition policies.
It is clear from this analysis that, in order to give effect to the stated desire in theSingapore WTO Ministerial Declaration of December 1996, “to ensure that thedevelopment dimension is fully taken into account”, it would not be enough to simply
suggest that all that developing countries need is a longer time frame to be able to
Competition Policy, Development and Developing Countries 15
implement the US or UK type of competition policy. The special and differentcircumstances of developing countries and their developmental needs require a creativeapplication of the new concepts above to competition policy questions.
The concepts introduced in this paper are not only relevant to competition policy in
relation to economic development but also have important developmental implications fora number of different areas of the WTO Agreements, including those on TRIPs, TRIMs,and on Subsidies and Countervailing Measures. However, in view of their complexity, eachof these subjects merits a full paper. Further, since a number of these topics are beingdealt with in other parts of the work programme of the South Centre, these are notdiscussed here in any detail. Nevertheless, some brief remarks need to be made on someof the topics to indicate the wider application of the analysis presented in this paper.
First of all, it is important to appreciate that the concepts outlined above are only
“new” in relation to the present WTO, UNCTAD and OECD studies and working groupson the subject: at another level, the validity of the concepts is not only accepted bymodern economics but also implicitly recognized in various parts of the WTO Agreementsthemselves. For example, the underlying economic justification for the TRIPs Agreement
is to be found in the concept of dynamic efficiency. Restrictions on competition are
accepted under the Agreement in order to promote technical change and long-termeconomic growth. However, since most patents are held by advanced countrycorporations and individuals, the Agreement promotes the dynamic efficiency ofdeveloped rather than developing countries.23
Similarly, the notion of industrial policy is implicit in the Agreement on Subsidies
and Countervailing Measures which does not prohibit government grants to private firmsto promote R&D, or subsidies granted to disadvantaged regions, or those relating to newenvironmental laws. This rule again favours industrial policy requirements of advancedcountries; many of the subsidies of interest from the perspective of industrial policy indeveloping countries are ruled out, for example, prohibited subsidies include thosecontingent on export performance, or those given for the use of domestic in preference toimported products.24
Thus, those who are uncomfortable with new concepts may wish to note that
essentially what this paper has done is to make explicit certain economic principles whichare already implicit in WTO Agreements. These have been used in the Agreements to theadvantage of advanced countries but they can be applied just as well to the question ofcompetition policy from the perspective of developing countries.
The broad analytical framework of this paper also has implications for some other
important areas of WTO agreements to which it may be useful to draw attention. To take
23 For a fuller discussion of competition policy in relation to the TRIPs Agreement see Dumont and
Holmes, 1999; Correa, 1999. 24 The Agreement does recognise the interests of developing countries to some extent by allowing an
extension of the time period for its implementation by different groups of countries. For example, least
developed countries and other WTO members with GNP per capita of less than US$1,000 are exempted
from the prohibitions on certain subsidies (such as export subsidies) until export competitiveness is achieved
(defined as the attainment of a share of 3.25 per cent of world trade in a product for two consecutive years).
Other prohibited subsidies must, however, be eliminated by these countries within a period of five years
(eight years for LDCs) from the entry into the force of the WTO Agreement. See further Singh, 1996. 16 South Centre T.R.A.D.E. Working Papers
first the question of anti-dumping and countervailing duties, these have been used byadvanced countries as a straight forward protectionist device, as is increasingly recognized(Stiglitz, 1999). A recent study of US anti-dumping cases suggests that, if these had beensubject to the equivalent US competition policy standard of predation, more than 90 percent of them would have failed.25
Should developing countries favour the abolition of anti-dumping measures because
these are often used unfairly against their products? The answer to this question is notsimple, as is indicated by the fact that a number of developing countries are also using thisdevice, often against the products of other developing countries. In the past, underGATT, developing countries were able to use the balance of payments clause to supporttheir infant industry policies. Under the WTO, however, there has been considerableerosion of this “balance of payments defense”. In view of the fact that developingcountries will require, for some considerable period, protection for their successive newindustries as they expand their industrial base, they may have to resort to anti-dumpingand countervailing measures for this purpose. Section C, Article XVIII of GATT,permitted developing countries to impose restrictions and protect infant industries. However, because the use of this provision required payment of compensation, since 1967
no developing country has invoked this article. Instead many developing countries usedSection B (protection for balance of payments reasons) which did not requirecompensation, to achieve in effect the same result. Therefore, unless developing countriesare provided with an alternative instrument for protection, it will not be in theirdevelopmental interest to seek the abolition of anti-dumping and countervailing measures.
Turning to the Agreement on TRIMs, the analysis in this paper suggests that it
deprives developing countries of important industrial policy instruments which haveproved useful for economic development. Some of these on the prohibited list such aslocal content requirements have been widely used by the highly successful East Asiancountries during the last three decades. Further Correa (1999) suggests that some TRIMswere also used to control horizontal as well as vertical restrictive business practices ofmultinational corporations. He criticizes the prohibition of such measures under theTRIMs Agreement as this withholds from developing countries important instruments tocounteract anti-competitive practices. Developing countries should therefore seek torevise this Agreement when it comes up for review as part of the in-built WTO agenda. 6.2 Implications for developing countries
There is an immediate difficulty in discussing the implications for developing countries ofthese analytical conclusions. Since the experience of many developing countries is thateven a seemingly non-prejudicial discussion of a sensitive subject such as competitionpolicy can subsequently, under advanced country pressure, lead to full-blown negotiations,in practice many countries will quite rightly take a tactical approach to this question. Theymay therefore simply wish to terminate discussions on the subject altogether in the WTO
and other fora in order to maintain their freedom of manoeuvre. Competition Policy, Development and Developing Countries 17
These tactical and practical considerations are fully understandable and so will not be
commented upon here. These are matters of judgement for those directly involved inWTO diplomatic activities.
However, in any substantive discussion of competition policy, either in the WTO or
in other fora, it would be useful to draw attention to the implications of the foregoinganalysis which to some may seem obvious. Firstly, developing country representativesshould point out that the issue of competition policy has hardly received any seriousattention at all from the perspective of economic development in any of the fora wherethese issues are being considered. Secondly, for this purpose, the need to examine thesematters in terms of new concepts of the kind outlined here should be stressed. This inturn requires developing country representatives to themselves gain an understanding ofwhy the discourse on competition policy entirely in terms of the traditional WTOframework of market access, national treatment, transparency etc. is prejudicial to theirdevelopmental interests.
To provide a simple illustration, it may be perfectly legitimate for a developing
country competition authority to allow large domestic firms to merge so that they can go
some way toward competing on more equal terms with multinationals from abroad. Even
if the amalgamating national firms are on the horizontal part of the L-shaped static costcurve, bigger size may still promote dynamic efficiency for the reason that firms need toachieve a minimum threshold size to finance their own R&D activities. The competitionauthority may therefore quite reasonably deny national treatment to the multinationals andprohibit their merger activity (because they are already large enough to achieve either staticor dynamic economies of scale in this sense). In these circumstances, a violation of thedoctrine of national treatment is likely to be beneficial both to economic development andto competition.26
Thirdly, a clear message of this paper is that developing countries require special
treatment in the sense of being allowed to pursue competition policies which areappropriate to their stage of development. There should certainly be no multilateraldisciplines of the WTO type obliging developing countries to have universal competitionpolicies or indeed any competition policy at all if they do not think that the cost/benefitanalysis of such a policy is worth their while. As indicated by the analysis of the paper, itwould be advisable for most developing countries to institute a competition policyappropriate to their needs. But, as suggested earlier, enforcement of the competitionpolicy does require a strong state which many developing countries may not have. In thesecircumstances, a competition policy could simply lead to more corruption and rent-seeking.27
Fourthly, even with appropriate domestic competition polices which meet the
development test, developing countries would still require international co-operation tocope with the anti-competitive consequences of large international mergers, cartels, etc. The best solution would be the establishment of an international competition authority,
26 As far as we are aware, there are no agreements as yet which specify national treatment of firms in
relation to merger activity. What is being suggested here is that developing countries should resist any
moves in that direction. 27In practice, however, most countries do have some form of a competition policy, although this may be
implicit rather than explicit. Without some generally accepted rules governing fair competition, economies
and societies will experience a number of difficulties. (See further Graham and Richardson, 1997.)
18 South Centre T.R.A.D.E. Working Papers
having proper representation of the South in its governance and not dominated by theNorth. The international competition authority would be charged with maintaining faircompetition in the world economy and keeping the markets contestable by ensuring thatthe barriers-to-entry to late industrializers are kept at low levels. It would have theauthority to scrutinize mega mergers, to prohibit them if necessary and, in any case, todeter the mega firms from abusing their dominant positions. For good administrative andpractical reasons, references to the competition authority would only be permissible incase of anti-competitive behaviour by corporations above a certain size. The size criterionwould normally keep even most large developing country corporations outside the directpurview of the competition authority, but, nevertheless, the latter would recognize thespecial needs of developing countries as indicated in this paper.
However, such a legally enforceable international agreement will take some time to
construct in view of the differences between developed and developing countries andsignificantly between the developed countries themselves on this subject. This is not todeny that there has been some useful international co-operation in this area betweendifferent groups of countries during the last two decades, but it has been quite limited. Following discussions of restrictive business practices by large multinationals in developing
countries at UNCTAD II, New Delhi, 1968, and UNCTAD IV, Nairobi, 1976, the U.N. General Assembly in December 1980 adopted by Resolution 35/63 a “Set of MultilaterallyAgreed Equitable Principles and Rules for the Control of Restrictive Business Practices.”The “Set” is fairly comprehensive in scope and covers a wide range of restrictive businesspractices by multinationals, including the abuse of their dominant positions whetherachieved through mergers and acquisitions or joint ventures. However, the Set is notlegally binding and has therefore not been helpful to developing countries. (See further,Correa, 1999.)28
What is being suggested here is a legally binding rather than a voluntary international
agreement for a global competition policy authority. Until such time as an agreementmaterializes, developing countries, especially small ones, would do well to begin to co-operate with each other through regional pacts and other arrangements, in order torestrain these restrictive business practices and influence the outcome of merger activitiesin advanced countries.
28 Similarly in 1986, the OECD, the organization of developed countries, issued guidelines concerning
restrictive business practices by multinationals. Under the guidelines, which again were advisory rather than
legally enforceable, multinational enterprises were enjoined to refrain from a wide range of anti-competitive
activities including abuses of intellectual property rights, predatory behaviour, competition reducing
acquisitions, etc. (See further, OECD 1986; Scherer, 1994). Competition Policy, Development and Developing Countries 19SELECTED BIBLIOGRAPHY
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