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Wednesday, January 25, 2012

Institutional Coherence and Effectivity of a Regional Competition Policy: The Case of the West African Economic and Monetary Union (WAEMU)

Posted by D. Daniel Sokol

Mor Bakhoum, Max Planck Institute for Intellectual Property and Competition Law and Julia Molestina, Max Planck Institute for Intellectual Property and Competition Law have written on Institutional Coherence and Effectivity of a Regional Competition Policy: The Case of the West African Economic and Monetary Union (WAEMU).

ABSTRACT: In the context of globalization the shift from the national to the global has become an economic reality and advanced the emergence of regional integration groups alongside regional competition policies. In the same vein, the West African Economic and Monetary Union (WAEMU) has adopted a regional competition law, which entered into force in 2003.

WAEMU follows a centralized approach to its competition policy, in which the Union not only has the exclusive competence to legislate on anticompetitive practices, but also bears the exclusive decision-making power regarding the enforcement of the law. National competition-law authorities are mainly excluded from the decision-making process and limited to consulting or executive functions.

However, the centralized approach is not flawless. The expected reforms in the member states are still pending, the collaboration of national structures and the community is not effective and the regional institutional level, which was supposed to constitute a strong authority, faces severe constraints in terms of resources and flexibility. The regional case law also remains limited. The effectiveness of the community competition law thus far has failed to live up to its expectations.

This paper builds on WAEMU’s eight years experience of enforcement as well as other regional integration experiences, such as ECOWAS or the EU, and identifies a certain number of criteria, which should be taken into account when designing a regional competition policy. The so called “competition constraints” are the number of states and the level of integration of the regional market, the fluidity of trade between member states, the respective institutional capacities of the member states and the Union, the existence or lack of a competition culture in the member states and the time dimension.

By analyzing the interaction between the competition constraints and the institutional design of a regional competition policy, one can extract certain principles of orientation regarding the applicable substantive law and the distribution of competences.

Applying the lessons learned to the case of WAEMU, the insufficient involvement of the national competition law authorities appears as one of the main deficiencies of the institutional framework of WAEMU. Therefore, this paper calls for a “controlled decentralization”, which includes the installation of a new collaboration framework between the regional and the national level.

http://lawprofessors.typepad.com/antitrustprof_blog/2012/01/institutional-coherence-and-effectivity-of-a-regional-competition-policy-the-case-of-the-west-africa.html

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