Friday, August 10, 2007
Posted by D. Daniel Sokol
Eleanor Fox of NYU Law School has a fascinating new article about the role of antitrust in economic development, Economic Development, Poverty, and Antitrust: The Other Path.
ABSTRACT: Antitrust law is a multi-faceted discipline. It guards against certain creations and misuses of economic power. It facilitates the functioning of markets. Sometimes it pries open closed markets, wresting them from public and crony control. In some jurisdictions it empowers David to compete against Goliath. In others, it shields David from being trampled by Goliath. In matters of antitrust, protection of the weak from the powerful is a refrain most loudly heard in connection with the asserted needs of developing countries.
Meanwhile, in developed countries, it is often insisted that antitrust is only “for efficiency,” defined as aggregate wealth and applied with the assumption that markets increase aggregate wealth. Developing countries retort that antitrust for developing countries must also address concerns of distribution and power. Developed countries rejoin that global efficiency demands that laws converge, and laws should converge toward that of the developed world, lest they protect inefficiencies, drive prices up, and increase risks of arbitrary enforcement power, defeating the promise of markets.
This article wrestles with this tension. It argues that antitrust should not be used to protect David from Goliath, but it may be used to empower David against Goliath. The article suggests factors, principles, queries and strategies that may help developing countries in their quest for an antitrust law that is fair and efficient for them.