What is the Relationship between Competition Law and Policy and Economic Development?

What possible contributions to economic development can the appropriate enforcement of competition law make? What harm could result from such enforcement? These two questions are uppermost in the minds of many policymakers, analysts, and scholars as they debate the merits of introducing and then implementing national competition laws. Now that, according to some counts nearly 100 nations-many of which are in the Asia-Pacific-have adopted competition laws, one might have thought this debate has been won by advocates of such legislation. However, both supporters and opponents are well aware that the effects of competition law can be neutralized or offset well after the enactment of legislation, through denying the relevant enforcement agency the resources, the freedom, and the political support to complete its assigned functions. Therefore, the debates over the merits of competition law continue and the objective of this chapter is to state and evaluate the many ways in which fostering inter-firm rivalry can alter different
aspects of national economic performance. A number of competing perspectives are discussed in section three of this chapter. First, however, the technical nature of the debate over competition law requires clarification of the meaning of a number of important terms used in the existing literature. The payoff from this is to highlight the important difference between competition law and competition policy, two terms that are frequently confused in policy debates. The next section of this chapter is devoted to such matters and sets the stage for the substantive discussion that follows.