Wednesday, May 23, 2007
Posted by D. Daniel Sokol
Measuring the capabilities and effectiveness of antitrust agencies has proved to be a difficult task. It seems that objective measures have significant limitations. Measure the total number of cases brought and you may reward agencies for brining small cases, even if they are not good cases. Measure based on success rate of enforcement and you penalize agencies that bring difficult cases that are close. One method is to measure the quality of the agency based on perceptions by international antitrust practitioners and international businesspeople. In the first cross country analysis of agency effectiveness, Armando Rodriguez of the University of New Haven and Lesley DeNardis of Sacred Heart University measure the effectiveness of antitrust agencies by this third approach in their paper Examining the Performance of Competition Policy Enforcement Agencies: A Cross-Country Comparison.
ABSTRACT: An examination of a cross-section of 102 nations reveals marked differences in the performance of their competition policy enforcement agencies. Likely explanatory factors considered include gross domestic product per capita, the intensity of competition, physical size, the level of corruption, national experience with a modern antitrust law and whether the common law prevails.
Competition policy agencies operate poorly in jurisdictions characterized by corruption and poor competitive intensity. In fact, differences in levels of corruption and variations in the intensity of competition account for approximately 78 percent of the observed variance in agency performance. Group characteristics, however, vary by region and have varying impact on the observed performance gap. Rather than a generalized approach to the promotion and diffusion of competition policies, our results suggest that distinct policies for each region are likely to be more successful.