Introduction

The focus of this chapter is to analyse the current literature relevant to the theory of competition and then to review the arguments - economic, political and legal - as to the desirability of developing countries, countries in transition and small economies adopting competition law. Opinion is sharply divided as to whether or not, as a matter of economic theory, such a policy decision is justified, never mind the political and practical issues that an aspiring adopter would need to address.

There is a considerable literature concerning the economics of competition and the adoption of a competition law regime. Those who have been intimately involved in the drafting and implementation of new competition systems hold a plethora of divergent views. In many cases, comprehensive competition law systems have been adopted by states without the appropriate infrastructure to support effective implementation. This often creates the worst possible scenario of a superficially sound system that is in reality nothing but a hollow shell. This bleak picture is often the result of a well-intentioned but fickle commitment by international aid organisations. Often they propose (or require) the adoption of competition law but do not then provide resources for the efficacious rollout of the new pro-competition measures, so that the institutional structure is fatally weakened before the system has even been put into operation. Political and governmental weaknesses then compound this flawed approach. Further, a one-size-fits-all mentality is often apparent, that demonstrates either a bias towards the foreign consultants’ own familiar but complex system and/or a lack of knowledge of the realities of government and lawenforcement in the recipient country.