Tuesday, February 27, 2007
Posted by D. Daniel Sokol
I am off to DC tomorrow for my presentations to the World Bank (Thursday) and the Inter-American Development Bank/OECD mini-conference on competition policy (Friday). While in DC, I will will have a chance to meet up with George Mason Professor Todd Zywicki (and blogger on the Volokh Conspiracy). This is a special treat for me because Todd just posted a working paper version of his book chapter for my forthcoming edited book on Latin American Antitrust Developments. Todd and his co-author James Cooper of the FTC were part of the dynamic duo within the FTC Office of Policy Planning who brought us the important State Action Task Force Report. Based on their experiences in competition advocacy in the US, they have a number of lessons to share with Latin American enforcers. Given the larger role of the state in Latin America economies, these may be critical lessons.
ABSTRACT: Competition authorities have several tools at their disposal in crafting a competition policy. Most prominent are litigation and merger review. A less-recognized but often effective tool, however, is competition advocacy. Broadly, competition advocacy is using persuasion, rather than coercion, to convince government actors to pursue policies that further competition and consumer choice. Competition advocacy can be especially useful in attacking government-created regulatory barriers to competition and in cultivating a culture of competition to educate the public on the economic benefits of competition as the organizing principle of the economy. From a cost-benefit analysis, competition advocacy can often generate substantial pro-consumer outcomes at low marginal cost.
Fostering a vigorous competition advocacy program can be especially valuable in Latin American countries that historically have had heavily-regulated economies and a weak culture of competition. This article draws on the experience of the Competition Advocacy Program of the United States Federal Trade Commission during the past 30 years to provide lessons for Latin American competition authorities seeking to build competition advocacy programs. This article is a chapter in a book on Latin American antitrust law and explains how competition advocacy can be an important and fruitful element of a vigorous competition policy in these developing economies.