Together, these principles comprise the “holistic approach” to competition law and policy which is referenced in the title of the paper:

• First, the focus of policy makers in using competition policy as tool for poverty reduction should be on approaches that are relatively easy to implement but have a track-record of being effective and economically sound.

• Second, for competition policy reforms and legislation to be successful, public acceptance and support is critical and must be an essential focus of related initiatives.

• Third, to serve as an effective tool of poverty reduction, competition policy needs to address the needs of the citizens of poorer societies in their capacities as producers (and, therefore, as users of extensive input goods and services, including public infrastructure), in addition to their capacities as final consumers/households.

• Fourth, it is posited that “competition policy” is more than just “what competition agencies do” and includes the full spectrum of measures that governments employ to enhance competition and improve the performance of markets.

• Fifth, in order to address the challenges posed by the changing landscape of competition policy worldwide, new forms of international co-operation may need to be considered.

The paper then develops the application of these principles with respect to five specific areas in which competition policy can contribute to poverty reduction, namely: (i) the reform of public and business infrastructure sectors, particularly in the context of developing and transition economies; (ii) the complementary roles of competition law enforcement and market liberalization in public procurement markets; (iii) various related dimensions of competition policy as they relate to public health objectives; (iv) the addressing of possible monopsonistic practices in international supply chains that may affect the ability of developing country producers to reap gains from participation in international markets; and (v) measures to address the enduring problem of international cartels which, despite an impressive record of prosecutions by developed jurisdiction competition agencies over the past decade, continue to impose substantial costs on developing economies. The paper concludes with some observations regarding the future of international co-operation in the competition policy sphere.

No: ERSD-2013-02

Authors:

Robert D. Anderson and Anna Caroline Müller, WTO

Manuscript date: February 2013

Key Words:

Competition policy; poverty reduction; development; infrastructure reforms; international trade; government/public procurement; public health; international supply chains; international cartels; international co-operation.

JEL classification numbers:

F, F1, F13, F5, H, H5, H51, H57, I, I1, I18, K2, K21, K23, O, O13, O19, O24

Disclaimer  back to top

This is a working paper, and hence it represents research in progress. This paper represents the opinions of the author, and is the product of professional research. It is not meant to represent the position or opinions of the WTO or its Members, nor the official position of any staff members. Any errors are the fault of the author. Copies of working papers can be requested from the divisional secretariat by writing to: Economic Research and Statistics Division, World Trade Organization, Rue de Lausanne 154, CH 1211 Geneva 21, Switzerland. Please request papers by number and title.

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