Cartel Damages to the Economy: An Assessment for Developing Countries
This paper assesses the potential economic harm caused by cartels in developing countries
Abstract
To date, whether competition law enforcement is indeed beneficial for the economy still remains a questionable topic. In the majority of jurisdiction collusive practices that aim at fixing either prices or market shares are considered as damaging per se as firms get an opportunity to block the entry of new rivals or to overcharge for their products or services without adapting the quality. Nevertheless, developing countries still struggle to find the supportive evidence that would help them to create or reinforce their antitrust divisions - research on the topic appears not to be not only limited, but also mainly of a qualitative nature. The principal goal of this paper, published as a book chapter in ‘Competition Law Enforcement in the BRICS and in Developing Countries’, is to provide the missing evidence by assessing the potential economic harm caused by cartels in developing countries.
For this purpose the authors have created a dataset that contains information on more than 200 major ‘hard-core’ cartels prosecuted in more than 20 developing countries from 1995 to 2013. they have also developed an original and relatively simple methodology that they employed to estimate the cartel’s economic harm - in terms of price overcharges and consumers’ welfare losses - when sufficient data were available.
This research was funded under the Private Enterprise Development in Low Income Countries (PEDL) Programme
Citation
Ivaldi, M., Khimich, A., Jenny, F. (2016) Cartel Damages to the Economy: An Assessment for Developing Countries, Competition Law Enforcement in the BRICS and in Developing Countries.
Links
Cartel Damages to the Economy: An Assessment for Developing Countries