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	Table of Contents
p. 36 of 62 BACK | NEXT Purpose and Structure of the Toolkit Overview of Practices Controlled by Competition Law Countries with Competition Law Systems Benefits of Competition Policy Practices Controlled by Competition Law Key Concepts and Tools Competition, Privatization, and Regulation Emerging Economies Does Everyone Benefit From Competitive Markets? All Economies Suffer from Anti-Competitive Practices Competition Policy, Competitiveness and Productivity Competition Advocacy: Effective Tool Against Special Pleading Need for Merger Control Importance of Granting Resources to Competition Authorities Consumers' Empowerment Education Regional Solutions UN Conference, November 2005 Enforcement Mechanisms ADB Resources and Projects Other Resources Glossary and List of Abbreviations

Competition Law Toolkit : Emerging Economies

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B. All Economies Suffer from Anti-Competitive Practices

Anti-competitive practices such as cartels and exclusionary behavior on the part of firms with significant market power occur in all economies—big, small, developed, or developing.

There is no reason to assume that this is true only of large, developed economies. Price-fixing between competitors will always be attractive to firms that wish to maximize their own profits at the expense of their customers, and there is little reason to assume that they will voluntarily refrain from doing so, unless they are constrained by competition law. Similarly, local monopolies will have no incentive to improve their performance and will have every incentive to deter the entry of new rivals into the market. Competition law may be able to expose such monopolies to competitive forces. Work conducted by Levenstein and Suslow has attempted to estimate the damage done to developing countries as a result of international cartels.

The actual application of competition law in practice will, of course, depend on the economic circumstances of any particular country. Outcomes may differ from one country to another, and it is also possible that the content of one country's laws may differ from that of another because of specific local issues (social, cultural, economic.) However, this does not detract from the fact that anti-competitive practices are widespread, and that they do not discriminate between different types of economies.

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