The Regulation of Cartels in Developing Countries
Developmental aspects of competition regimes are analyzed, respectively, in four advanced countries, such as the U.S., UK, France, and Germany, and four DCs including Mexico, South Africa, China, and South Korea. Based upon the analyses, it is highlighted
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The Regulation of Cartels in Developing Countries
Abstract Developmental aspects of competition regimes are analyzed, respectively, in four advanced countries, such as the U.S., UK, France, and Germany, and four DCs including Mexico, South Africa, China, and South Korea. Based upon the analyses, it is highlighted consensus-building process for cartel enforcement with respect to economic development, and proposed institutional supports for adopting cartel regulations, particularly sanctions, leniency program, and bounty system. It is argued that DCs should have international collaboration in order to develop and cooperate each other toward better and effective cartel regulation.
Keywords Regulatory development Consensus-building Cartel enforcement International cooperation Competition authorities Leniency program Bounty system
5.1
Introduction
Mark M. Brown, while serving as the head of UN Development Program, had stated that, with focus on importance of the independent capacity-building of DCs, development is not a linear thing, whereby we could solve human suffering with throwing money. According to him, developing countries and those who assist them should invest in people through education, health, and make space for a strong private sector with suitable rewards along the way to development in the shape of aid from the World Bank and other donors.1 Compared to other issues in competition policy, an effective cartel regulation causes the reform of business environment into a competitive one by directly raising efficiency and consumers’ welfare. Therefore, the effective cartel regulation contributes to building a strong private sector under a competition culture because a cartel causes inefficiencies through the malfunction of market mechanism and direct damage to consumers’ welfare.
1
Fasulo (2004), at 170.
© Springer Nature Singapore Pte Ltd. 2016 J.S. Lee, Strategies to Achieve a Binding International Agreement on Regulating Cartels, DOI 10.1007/978-981-10-2756-7_5
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5 The Regulation of Cartels in Developing Countries
Transitional economies’ concern about keeping long-standing state-monopoly is not an issue for cartel regulations. Protecting domestic companies from foreign investors’ mergers and acquisitions is only a collateral problem in cartel regulation. Activating effective cartel regulation in DCs, therefore, looks to generate net benefit to DCs, and even LDCs. The practices of cartel law in DCs, however, do not reveal a strong attitude in implementing the law. The reality of their cartel policies demonstrates that they face poor resources, e.g., insufficient personnel and funds, ineffective institutions, immature skills, unstable support for anti-cartel policy, and a lack of understanding of competition norms. DCs are not equipped with the type of environments for the rigorous enforcement of cartel regulation in comparison with advanced countries that have developed cartel regulation and its enforcement with a long duration of time and much investment of financial and huma
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