Competition Law and Policy in the Global South: Power, Coercion and Distribution

1. Introduction

Competition laws are so malleable that they can be used in many ways to structure alternative market configurations. Over the years, the image of the ideal market, and the role of competition law and policy therein, has been significantly narrowed to a neoclassical concept of perfect competition and allocative efficiency. This ideal has spread the world over, particularly into the Global South with the frenzied adoption of competition laws at the height of the neoliberal reforms. This market ideal has been proscribed as the gateway to development through its alleged neutral forum of exchange—the free market. All that was needed to reap its benefits (efficiency, low prices, innovation, increased welfare, etc.) was to guarantee the freedom of actors, protect absolute property rights and make sure the state does not intervene in the functioning of the market, beyond its limited role to assure the respect of property and contract rights and enforce specific regulations that correct market distortions, like competition laws.

Robert Lee Hale, a progressive institutional economist, in his 1923 piece on Coercion and Distribution in a Supposedly Non-Coercive State,^[1] stated that ‘[b]ut were it once recognized that nearly all incomes are the result of private coercion, some with the help of the state, some without it, it would then be plain that to admit the coercive nature of the process would not be to condemn it’.^[2] The spirit of this quote—as well as much of Hale’s body of work—was to challenge the assumptions that income generated in the marketplace is neutral or that market exchanges are free and voluntary. Instead, he showed that markets are social creations—creatures of the law. There is nothing natural or neutral about how the markets work—they are simply a system of intertwined power relations that are affected by the previous distribution of property and entitlements.^[3] According to Hale, therefore, markets are an organized form of coercion of the weak by the strong—a state of constant and mutual coercion. Law plays a fundamental role in delineating the contours of this coercion by setting background rights and sets of entitlements.^[4]

Contrary to the realist and progressive accounts, such as Hale’s, according to the orthodoxy, the market is considered a ‘self-executing system that justly distributed rewards through voluntary agreement among individuals’.^[5] The legal expressions of free market principles are represented by the institution of contract—where any interference with the freedom of parties to enter into contractual arrangements is seen as an attack on the very idea of the market as a natural and neutral institution for distributing rewards.^[6]

Despite demonstrating that all market transactions are affected by the previous distribution of property and entitlements, and that the market was an organized form of coercion of the weak by the strong,^[7] Hale’s analysis was, nonetheless, different from the Marxism of the time, which offered a model of the absolute impoverishment of the working class. According to Marxist analysis, capital was free to coerce the working class into accepting an exploitative wage rate, without any bargaining at all, since one side—the working class—has no bargaining power.^[8] According to Hale, coercion is not one sided, but mutual; each side is constrained, as each can inflict harm in some ways but not in others. Hale’s account of the coercive nature of the market was rooted in his account of the market as a social construct, ‘a creature of law, government and prevailing conceptions of legitimate exchange’.^[9]

Since the 1920s, many currents in law and other social sciences have been unpacking these ideas and nuancing them further, particularly by the legal realists, institutional economists and critical legal scholars. The progressive attack on the market was grounded in a disenchantment with the notion of freedom of contract, producing a deep critique of the voluntariness of market exchanges and the overall fairness and justice of the entire structure of market relations.^[10] Progressive economists and jurists alike have also strongly pursued a critique of the naturalness and legitimacy of the market. They have relentlessly written to demonstrate that the market was not natural and was nothing but a social construct that could be judged only by its social consequences.^[11]

My work on competition in the Global South is situated against this backdrop of legal realism, critical legal scholarship and progressive institutional economics. I want to challenge, like Hale, and many others, the notions of market neutrality, efficiency, freedom of bargaining and voluntariness of market interactions. I seek to unpack the different layers of the market, which are constructed through laws, social relations, rights and background entitlements. Competition laws are one part of this complex puzzle: like other laws, they shape different power relations, or—à la Hale—coercions, and can thus also be used to distribute wealth and power. The coercion, which I unpack in this paper, is witnessed at the level of adoption of competition laws across the Global South, of enforcement and of shaping the overarching competition policy. Once these instances of coercion are parcelled out, resistance through constructive critique can be provided. In exploring these critiques, alternative modes and framings of competition law and policy in the Global South could be imagined achieving goals different from those proscribed by the orthodoxy.

The paper is organized into three sections—in Section 2, based on ongoing empirical work, I discuss the spread of competition laws to the Global South, the transplanting of perfect competition as the ideal market structure and its impact on the enforcement of these laws. In Section 3, I discuss the notion of competition and contrast it with industrial policy. Here I look into both historical and current practices around market organizations to show the alternatives that once reigned. These alternatives have been replaced by today’s dominant framework of competition law and policy-centring enforcement around efficiency and perfect competition. The last section of the paper explores how inequality could be squared with a competition policy that pursues the public interest to address inequality and social justice.

2. Competition Law in the Global South

A. The Spread of Competition Laws

Since the 1990s, countries in the Global South have been increasingly adopting specialized competition laws aimed at encouraging competitive behaviour and prohibiting anticompetitive activities.^[12] In the Global South today, most countries have such a specialized competition law in place. This is a stark contrast to before the 1990s, when less than 10 countries had a competition law in force.^[13] The surge in adopting competition laws reached its zenith in the 1990s with the height of neoliberal reforms as part of the Washington Consensus, the emergence of various multi-country trade arrangements in the Global South and the sidelining of socialist alternatives to free market configurations and globalization requirements.

One of the main reasons the adoption of these laws has mushroomed across the Global South is due to pressure—or coercion—of trading partners, donor institutions and international financial institutions (IFIs).^[14] Trade partners in the Global North, most notably the European Union (EU), have conditioned trade deals with countries in the Global South on the adoption of competition laws modelled on the EU framework.^[15] Treaties, such as the Accession Agreements signed by Eastern European countries to join the EU or the Euro Mediterranean Partnership Treaties signed by various non-European Mediterranean countries and the EU, call for the adoption of the basic competition rules of the EU, especially with regards to collusive behaviour, abuse of dominant position and competition-distorting state aid insofar as they affect trade between the EU and the respective partner country.^[16] Other lending institutions—such as the International Monetary Fund (IMF) and the World Bank—have done the same: pre-conditioning their loans on the adoption of competition laws modelled on international principles of Western nations’ competition laws—arguing that globally harmonized legal standards facilitate international trade.^[17] Similarly, the United Nations Conference on Trade and Development (UNCTAD) model laws were widely used in this context.

Other countries have adopted these laws hoping to achieve development promises often ascribed to the realization of competitive markets.^[18] The main advocates for ‘competition law for development’ have been international organizations such as the Organization for Economic Cooperation and Development (OECD); the World Bank; the IMF and others. These international organizations have issued relentless advice pointing to these laws as the missing link for development and growth, while never fully explaining how this would happen. The General Council of the World Trade Organization (WTO) created a Working Group in the late 1990s on the Interaction Between Trade and Competition Policy.^[19] This Working Group has emphasized the need of developing countries to adopt competition rules due to the merger wave globally underway and due to the structural changes taking place in the developing countries themselves.^[20] The same stance has been presented in various OECD publications. One of those based on a survey of OECD members and non-members states that:

There are strong links between competition policy and numerous basic pillars of economic development. […] There is persuasive evidence from all over the world confirming that rising levels of competition have been unambiguously associated with increased economic growth, productivity, investment and increased average living standards.^[21]

Due to these coercive powers, countries in the Global South have adopted competition laws en masse. Most have adopted laws that lack any local flavour and desire an ideal that might not suit countries in the Global South. In many instances, these newly adopted competition laws are simply cut-and-paste replicas of laws in Western countries.^[22] The problem of adopting laws that are not tailored to address local needs is that there is a mismatch between what these laws set out to achieve and the needs of the countries adopting them. Given such a mismatch, these laws are often expected to be nothing but ink on paper. These laws are often assumed to simply signal compliance to donor institutions or trade partners without any intention or means to enforce them. It is also assumed that in order for these laws to be useful, countries adopting them in the Global South would need to resist implementing these laws in ways that do not meet the local needs. This means that in some cases, they would need to tailor strategic enforcement to their specific needs and in other cases, they would need to be able to challenge the imposed competition policy framing.

B. Competition Enforcement

Before unpacking ways to challenge the imposed competition law regimes in the Global South, it is important to understand what happens with these laws once adopted. To be able to do so, I have been collecting data since 2010 on competition enforcement in 50 countries across the Global South.^[23] Collecting such a database allows the assessment of what countries in the Global South do with these newly adopted competition laws. These data include enforcement endowment or capacity (also referred to as inputs) of the antitrust authorities to reveal their enforcement potential through their staffing levels and budgetary resources. I also assess enforcement outputs of the antitrust authorities through the different stages of the enforcement process. I collect data on collusion (horizontal and vertical agreements) and abuse of dominance.

Using these data, it is possible to discern a preliminary trend of increasing enforcement over time in most studied countries in the Global South. Particularly, enforcement inputs—namely budget and staffing levels of competition authorities—tend to increase over time. This might suggest that these competition enforcement agencies were indeed created to be ‘useful’ and to perform the tasks assigned to them under the competition laws. Otherwise, it would not have been a rational decision to increase these inputs over time. This increasing trend might undermine the presumption that these antitrust agencies are set up to only signal compliance to donor institutions and were not intended to carry out any form of enforcement.

However, one may argue that the inputs in many of these countries are facilitated by ‘donor money’, which might not prove the political will to enforce these laws. Nonetheless, the fact that the inputs steadily increase over time might undermine this claim. One might argue that no donor institutions will keep increasing money over a period of more than 15 years to fund antitrust authorities in countries that do not put this money to use. However, if the ‘donor money’ theory is indeed one that can describe where the funding of these authorities is coming from, then this would diminish the value ascribed to using the data on inputs as indicators of potential enforcement of antitrust in countries in the Global South. Therefore, in order not to put too much weight on the value of the input data, these must be analysed in tandem with the output values of these authorities. If these antitrust authorities undertake no activities, then one might be inclined to agree that the money put into these authorities cannot be used to assess their performance levels. Yet, if these authorities tend to be actively engaging in enforcing the antitrust laws, then their budgetary and staffing levels can be used as an additional dimension to the analysis of their enforcement activities.

Thus, turning to assess preliminary findings of enforcement activities of these competition authorities, a similar trend of increased enforcement over time is discerned. For example, the number of cases investigated and decisions rendered by these authorities increased over time as well. This finding appears to undermine predictions that these authorities are only created to please donor institutions and trade partners. Some enforcement activities, however, tend to flatten out or even decline over time. This declining trend might indicate that after the first few years where the authority is involved in an increasing number of cases, this involvement slightly decreases as the market participants become more aware of the kind of activities that raise red flags and also of what complaints will lead to a full-fledged investigation and which will simply be discarded. This increase in market awareness is arguably proportional to the time the authority has been involved in enforcing the law. With the passing of time, both potential violators and complainants know what to expect from the authority and act accordingly. It could also be that after a certain time of active enforcement, potential violators, eg, cartel members, work harder to hide their cartel activities.

With regards to mergers, which by default increase market shares and concentration levels, one would assume that countries in the Global South—that already struggle with high levels of concentration—would show active merger control.^[24] The reality is, however, different. Most mergers requested are approved in the majority of studied countries. Less than half of the sampled countries refuse 0%–1% of mergers filed. The high merger approval rate shows that the overall inclination is not to prohibit further increases in concentration levels, even though high levels of concentrations already characterize markets in developing countries.^[25] The high approval rate could also be due to the low notification threshold set in many of these countries, which results in too many mergers filed. It could also be due to the requirement of many countries to only file post-merger notifications—which generally leave the authorities with little ‘power to unscramble the eggs’.

Almost never challenging a filed merger could also mean that the merger control mechanism installed in many of the studied countries is nothing other than just a formal step required as part of the bureaucratic procedure necessary to approve global mergers. If all mergers requested are always approved, then this might indicate that no serious merger review is taking place. It might also confirm claims that countries in the Global South systematically approve or rubber-stamp international mergers that need their clearance to go ahead in Western nations. Similarly, it could illustrate the power of coercion of the merging companies vis-à-vis the enforcement agency.

Alternatively, one could argue that the lack of challenged mergers might also mean that the few challenged mergers have clearly sent a message to the firms intending to merge, whereby they are only requesting merger clearance when their applications cannot be refused. In other words, their merger filings are promising to realize efficiencies that are passed on to the consumers and are not offset by any anticompetitive effects (or whatever else the merger clearance standards are in the respective countries). Nonetheless, this activity—merger clearance—given it is often related to international trade and global merger filings, might be indicative of the coercive powers these authorities in the Global South find themselves facing vis-à-vis more powerful jurisdictions. Although their clearance is mandatory for the global merger to go through; they find themselves with little ‘actual’ power to act, without risking that these firms would quit their jurisdictions.

What this preliminary snapshot of enforcement across developing countries shows is that enforcement cannot be ignored. An assumption that developing countries do not enforce their competition laws cannot be upheld. This snapshot also tells us an interesting account of power and coercion. On the one hand, it shows that although the countries have been coerced to adopt these laws, their enforcement is undertaken at the local level and per local practice. This recognizes a certain space of tailoring enforcement to local needs. On the other hand, one could also recognize possible elements of coercion carried out at the enforcement level, particularly in the merger review process. Competition authorities in the Global South often find themselves without much power to stop global mergers and approve them without serious review or challenge. To unpack the different elements of competition enforcement further, the next part of the paper deals with what underlies such enforcement, namely the prevailing objectives or goals of the ideal market structure.

3. Competition vs. Industrial Policy

The image of the ideal market structure drives enforcement activities and shapes the competition policy further. Looking at the pursued ideal market structure, elements of coercion are also discernable. We get to see, as explored next, how this image is imposed on many countries in the Global South, with little room left to pursue alternatives. These alternatives are also further discussed below—framed as industrial policy—as means to offer space for challenging the dominant framing of orthodox market settings.

A. Perfect Competition: Consumer Surplus and Allocative Efficiency

The modus operandi of competition laws, in the North and South alike, is to structure markets following the economic model of perfect competition such that consumer welfare or surplus is maximized and allocative efficiency attained. Although the goals of competition laws cover a wide range of choices, each leading to a different outcome and enforcement objectives, the most widespread modern or mainstream goal of competition enforcement is the maximization of consumer welfare.^[26] It is a static (as opposed to dynamic) goal, as it is only concerned with actual prices at a given static moment in time. In economic terms, it is called consumer surplus—which measures the difference between what consumers are willing to pay for a good and what they actually paid (also known as wealth—maximization).^[27]

The ideal that is desired, namely a maximization of consumer welfare, is achieved when market prices are equal to the marginal cost of production; a situation that prevails under perfect competition. The theory entails that as soon as we move away from the perfect competition ideal, prices increase and consumer welfare decreases. Monopoly prices that may be charged by a monopolist will result in reduced consumer welfare and a dead weight loss to society, namely wasted resources that could have been productively employed but are not.^[28]

The presumption underpinning the model of perfect competition is that perfect competition forces prices down to the marginal cost of production and assures that societies’ resources are allocated in the most efficient way possible.^[29] Such a market structure entails that markets are pushed to accept an ever-increasing number of competitors with the desire to force prices downwards to ultimately be equal to the marginal cost of production. Economic theory suggests that prices above marginal cost signal the profitability of market entry, thereby enticing new players—local and foreign, small and large—to enter the market.^[30] No intervention from the state or any regulator whatsoever is needed; except to enable prices to be set freely by the interaction of the forces of demand and supply. In other words, only protections that guarantee the free functioning of the market are put in place—those that enable supply and demand to freely interact with each other—without any meddling with or disruption to the prices set by the market. This is guaranteed through the legal apparatus that assures the protection of the freedom of contractual arrangements and the sacredness of private property. All actors are then simply interpreting pricing signals to enter or exit a particular market or to buy or sell a particular product, etc. And their interactions, their buying and selling, determine the prices that then signal the next round of interactions.

Given this account of desirable market structure, countries in the Global South were persuaded to believe that market liberalization facilitating more competition is always better.^[31] They were made to believe that increased competition would bring them closer to the textbook ideal of perfect competition and thereby enable them to avail of the benefits that accrue from it. This state was hailed as desirable, particularly due to the centrality of the maximization of consumer surplus as a competition goal. Indeed, this pursuit was deemed desirable, regardless of its potential impact on the environment, working conditions of labour or quality of the products or services provided.

The dominant market ideal, of increasing competition and maximizing consumer welfare, has to a large extent shaped enforcement strategies—although it has not always achieved the desired outcomes of growth and development. Merger policy in the Global South might be a clear exception to this ideal market structure. Whether their merger policy is informed by a desire to pursue a different market ideal—one that does not follow the perfect competition framing—or whether it is due to simple coercion of the merging entities or global pressure to rubber stamp the mergers will never be known. What is however, important to signal is that desiring perfectly competitive market structures has not always been the desired ideal—in the North and South alike—and has itself come into question in recent years. This will be discussed next.

B. Neo-Brandeisians Challenge Consumer Surplus

The neoclassical economic ideal of allocative efficiency and the maximization of consumer welfare, realized in perfectly competitive markets, has recently seen powerful resistance from a group of antitrust scholars and activists. These scholars have become known as the neo-Brandeisians, recalling the positions of Justice Louis Brandeis, an ardent trustbuster and zealous protector of small businesses, who was considered the leading architect of American progressive era antitrust law. His ideas were published in a collection of his articles in 1914 under the title Other People’s Money—and How the Bankers Use It.^[32] He was vehemently opposed to monopolistic structures. He reasoned his antitrust position as a needed check on private concentrations of power to assure democratic governance. For him, any concentration of power was a direct threat to democracy. Smallness was desired not only for its competitive virtues, but mainly for its promise of democratic harmony. Justice Brandeis throughout his life continued to argue that breaking up large corporations would safeguard the economy from abusive monopolies. He also called for a competitive market to restrain corporate power which he considered a certain threat to democracy.^[33] Most importantly, he was of the view that just as the Constitution disperses power among the different branches of government, antitrust law enables a system of checks and balances in the private sphere.

The neo-Brandeisians, like their namesake, have been activity critiquing market concentrations and all forms of bigness.^[34] Yet, they have argued that the pursuit of allocative efficiency and the maximization of consumer welfare have distracted competition enforcers from the pursuit of competitive markets and the protection of small businesses. They have argued that the pursuit of consumer welfare and allocative efficiency has led to our markets becoming more concentrated and facilitated the rise of big tech—which are often able to increase consumer welfare and achieve allocative efficiency, albeit increasing market concentration—Amazon particularly stands out here.^[35]

Their critique is powerful and helps shift the discourse away from an exclusive focus on prices through an effects-based approach—where we only look at the effect of firm conduct—bringing the discussion back to look at market structure. Despite this shift in focus, they have continued a desire to increase competition—albeit for different reasons. This is so, given that they look to competition as an alternative to concentrated markets and as a challenge to the rise of bigness, especially big tech. They have managed to distance the desirable competition policy from consumer welfare and allocative efficiency, yet they have not altered the desirability of perfect competition. For them—like Brandeis—competition is desirable as a form of democratic accountability and protection of individual liberties.

In this regard, their positions and critiques have been important to weaken the desirability of maximizing consumer welfare and allocative efficiency. Yet, they have done little—or practically nothing—to alter obsession with competitive markets. They might have even contributed to consolidating fiercely competitive markets as an image of the ideal market. Their work is thus, only relevant for one part of the critique against the dominant neoclassical rhetoric of the virtues of perfect competition—namely challenging the desirability of maximizing consumer surplus and realizing allocative efficiency.

To resist perfectly competitive markets as an ideal market structure, one could resort to what I call instances of industrial policy. These instances are found when we look at other configurations of desirable market ideals, which stand in stark contrast with today’s dominant competitive market ideal. Although now we find considerable literature that points out the shortcomings of unfettered competition, particularly with regards to the effect on labour and the environment—looking at these instances of industrial policy is—I argue—more relevant to the countries in the Global South, especially given the relationship with development and growth. The next part discusses a number of such accounts ranging from the USA, and Europe to East Asia which have in common a purposeful withdrawal from either extreme—on the one hand, perfect competition and on the other, monopolized markets and thereby to develop what may be described as a heterodox approach.

C. Industrial Policy Alternatives

Since 2020, there has been a reawakened—and more visible—interest in interventionist industrial policy in Western nations.^[36] This was a consequence of the Covid pandemic’s disruptive impact on global supply chains. Countries around the world have been looking inwards at ways to produce locally to reduce dependency on international sources and thereby to reduce reliance on an unstable international trade. This trend has been amplified with the recent export and import controls particularly levied by the USA against China in a deteriorating trade relationship magnified by the Russia-Ukraine war. The US’s CHIPS and Science Act of 2022 is a case in point.^[37] This bipartisan bill is part of a larger industrial strategy claimed, ‘to revitalize domestic manufacturing, create good-paying American jobs, strengthen American supply chains, and accelerate the industries of the future’.^[38] This bill is one amongst several—alongside the Infrastructure and Jobs Act^[39]—that are now considered to constitute ‘a modern American industrial policy’ as the American National Security Advisor Jake Sullivan argued in his speech at the Brooking Institute on the 27 April 2023.^[40] In this speech he clearly laid out this modern American industrial policy, as follows:

A modern American industrial strategy identifies specific sectors that are foundational to economic growth, strategic from a national security perspective, and where private industry on its own isn’t poised to make the investments needed to secure our national ambitions. It deploys targeted public investments in these areas that unlock the power and ingenuity of private markets, capitalism, and competition to lay a foundation for long-term growth. It helps enable American business to do what American business does best—innovate, scale, and compete. This is about crowding in private investment—not replacing it. It’s about making long-term investments in sectors vital to our national wellbeing—not picking winners and losers. And it has a long tradition in this country.^[41]

This long tradition, that Sullivan refers to, can be traced back to the early 1870s, when several Midwestern states—Minnesota, Iowa, Wisconsin and Illinois—had passed laws to regulate the rates of railroads and grain elevators that came to be known as the Granger laws.^[42] The following twenty years saw several states passing similar laws, where some states controlled the rates through direct legislation and others by delegating rate-setting to a state commission.^[43] Ideologically, these laws were grounded in redistributive policies and based on public interest considerations.

The landmark case of Munn v Illinois of 1876 consolidated and reaffirmed the Granger laws and is often identified as the first moment of this regulatory experiment—or what I refer to as an instance of industrial policy—this is to be juxtaposed the Sherman Act enacted in 1890 seeking to increase market competition to assure small businesses could continue to survive in the face of bigger more concentrated firms or trusts. The Munn case dealt with an Illinois regulation that was passed in 1871 in response to pressure from the National Grange setting the maximum rates that private companies could charge for the storage and transportation of agricultural products. A private Chicago grain storage warehouse by the name of Munn and Scott was found guilty of violating this Illinois regulation. Munn and Scott appealed the conviction arguing that the regulation violated their constitutionally protected rights of property as it constituted a deprivation of property without due process of law. Upon appeal, the US Supreme Court held that the state could regulate the rates of grain elevators and warehouses to prevent monopolistic exploitation of consumers.^[44] The Court decided that this Illinois regulation did not violate the due process clause of the 14th Amendment which ordains that no State shall deprive any person of life, liberty or property without due process nor deny any person equal protection of the laws.

To reach this conclusion, the decision in Munn established the concept of a ‘business affected with the public interest’ and the state’s police power to exercise its authority to prescribe prices and performance standards for private businesses.^[45] Chief Justice Morrison Waite, writing for the Court, resurrected an old English legal doctrine to support his view: ‘when property is affected with a public interest, it ceases to be juris privati only’.^[46] In this way, this case provided the foundation for regulating all kinds of monopolies—not just the utilities—in the name of the public interest. It also broadened the reach of government to intervene in private enterprises and private market setting and thus promulgating a ‘belief in the public interest theory of regulation, a confidence in government’s ability to promote social objectives, a distrust of the effectiveness of market forces as a means for achieving coordination and conflict resolution in an industrialized society, and a scepticism regarding the effectiveness of competition as a constraint on monopolistic enterprise’.^[47] Subsequent cases have extended the notion of regulation developed in Munn v Illinois to electricity, gas, water supply, telecommunications, various forms of transport, insurance and warehousing.^[48] In a way, the decision in Munn meant that the Court held that the public had a right not to pay that portion of the price that reflected excess profits attributable to monopoly status.^[49]

Ideas of regulation and industrial policy laid out in Munn and the Granger laws became crystalized by the 1930s in what became known as the First New Deal, which was associated with the National Industrial Recovery Act (NIRA or NRA), the Agricultural Adjustment Administration (AAA) and the promulgation of industry codes which replaced free market competition.^[50] It was the first major effort to deal with the problems of industrial organization.^[51] All these measures were put in place in an attempt to recover from the Great Depression of 1929. In a way, the goal of the NIRA was to increase prices and restrict production, create profits and restart business investment.^[52] Its aim was for prices, wages and profits to be fair: neither too high nor too low.^[53] These initiatives led to what looked like government-sponsored cartels, especially given the sidelining of antitrust enforcement for action undertaken under the Recovery Act, through its famous antitrust immunity.^[54]

Many countries other than the USA, have pursued an active industrial policy and thereby a more nuanced market structure view—never holding perfect competition as the ideal. Such forms of industrial policy can be found in Germany, France, Great Britain and Australia, among many others. In fact at many moments in the development of the West, the dominant policy, was that of protectionism over competitive markets. Ha-Joon Chang has written about kicking away the ladder from beneath the developing world—a metaphor illustrating instances when developed countries have discouraged developing countries from following routes that they have taken themselves.^[55] Industrial policy, protectionism and the promotion of national champions are such examples of ‘kicking away the ladder’.^[56]

For example, cartelization was an important vehicle in industrializing and promoting exports in France and Britain—both countries were actively engaged in competition policies that authorized cartel activities as a means to develop their national industry.^[57] Germany, on the other hand, relied heavily on state-organized cartelization to plan economic and war activities.^[58] Evidence of preference for so-called anticompetitive activities can also be found as late at the 1980s when the European Commission approved the existence of a crisis cartel in the case of Synthetic fibres^[59] to protect local production and shield it against foreign imports.

These are but some of the many examples showing how today’s developed countries have used either selective enforcement or radically different competition policies, often in support of cartels or weaker rivals, to foster their industrialization and development. Only once they have achieved industrialization, and a certain degree of development, were they able to let go of their more protectionist heterodox market structure positions and embrace pure price theory and efficiency analysis to guide their competition enforcement goals.

Alice Amsden and Ajit Singh have shown that developing countries that have chosen to follow, what they call, a heterodox growth theory have outperformed those that have remained stuck in the perfect-competition deadlock.^[60] They show for instance, how during the years of their most rapid growth Japan and Korea ‘have deliberately restricted [competition] in many directions in order to increase their investment rate and to accelerate their technological development’.^[61] They also show that although competition was restricted, there was vigorous domestic rivalry which encouraged the countries’ international competitiveness.^[62] The idea was to protect young industries from competition in their early development phase only until they matured technologically. At that point, the government would allow competition until the industries in question would face a competitive decline and then, the government again would intervene to discourage competition.^[63] This ‘life-cycle’ process was organized as an investment race, setting exports and international market shares as significant performance targets.^[64]

Despite these protective measures, concentration rations in Japan actually declined.^[65] Amsden and Singh argue that the approach taken by the Japanese government, ‘was more pragmatic […] to antitrust enforcement, one that makes allowances for national goals such as industrial catch-up. It takes into account other collective values and extenuating circumstances in weighing enforcement decisions against the letter and spirit of antitrust laws. Included here are such considerations as economies of scale, enhanced efficiency, optimal use of scarce resources, international competitiveness, heightened productivity, business cycle stabilization, industrial orderliness, price stabilization and economic security’.^[66]

These examples of industrial policy, from different parts of the world, show their desirability: they facilitate the creation of jobs, the regulation of market prices, the promotion of exports, industrialization and resistance to reliance on imports or supplies through global value chains—among many others. They also show how many countries have pursued an alternative market orientation to the perfect competition ideal that has informed our dominant competition policy. Nonetheless, the pursuit of industrial policy—as a nuanced heterodox approach to market regulations—has been systematically curtailed and discouraged by IFIs, global trade partners and donor institutions. These institutions, with the support of scholars like Michael Porter, have warned against the dangers of industrial policy and the creation of ‘national champions’, arguing that unless a firm is forced to compete at home, it will usually quickly lose its competitiveness abroad.^[67] The argument is often that such industrial policy might be used to continue protecting mature industries against local and foreign competition in a way that hampers economic development beyond the early industrialization phase. They have pushed for the elimination of trade barriers and the pursuit of heightened competition—at home and abroad.

The recent positions taken in the USA with regard to industrial policy—as a result of its trade war with China—might be an indication of the changing tides. Are we at a moment where active industrial policy will no longer be considered undesirable protectionism? Is industrial policy in the Global South now only a possible policy alternative given that Western countries are openly adopting it (yet again)? What is certain is that the open adoption of industrial policy in countries like the USA is a momentum that countries in the Global South could capture to protect and encourage their own industrialization. Whether they will be able to do so will depend on their power and ability to coerce other countries, regulators and firms to accept their pursuit of industrialization, promotion of national champions and encouragement of selective enforcement. It might also depend on their willingness to square industrialization with broader public interest considerations, especially geared to address inequality. This will be discussed next.

4. South Africa, Inequality and Distribution

When industrial policies are pursued, it is often assumed that there will be a zero-sum game between the benefits accruing to the firms and the losses suffered by consumers, who will have to pay a higher price for the goods and services provided by the now-protected firms. Similarly, it is assumed that workers might also be negatively impacted given the increased bargaining power of the industrializing firm. These assumptions rely on our neoclassical understanding of the relationship between market structure, price and bargaining. It is assumed that when competitive pressures decrease, prices and bargaining power increase. And given that industrial policy often leads to a restriction on competitive forces, there is an expectation that prices and bargaining power will rise.

As a result, the pursuit of industrial policy is often framed to be disadvantageous to buyers and workers who will now have to buy from and bargain with more powerful (bigger) firms. As a result, the pursuit of industrial policy was held to further inequalities by empowering firms and increasing their dominance at the expense of consumers and workers. This has persuaded many—particularly in the Global South—to abandon industrial policy ambitions. Instead, countries in the Global South have opted to follow the dominant discourse, namely pursuing a competition policy that aims at allocative efficiency to increase consumer welfare by lowering prices. They have also aimed at increasing competition and thereby the bargaining power of consumers, workers and other stakeholders vis-à-vis the firms. These pursuits were envisioned to be in line with desires to deal with inequality.

What is, however, important to stress is that this dominant framing of competition policy that seeks allocating efficiency does not address distributional concerns—in other words, does not deal with inequalities. The only focus is on efficiency, and making the pie bigger, not how it is divided. The assumption is that tax and transfers can later undo the inequalities generated when efficiency is pursued.^[68] Yet this has only furthered income gaps and increased inequalities even more—making the rich richer and the poor poorer. It has entrenched a political economy that favours the ruling elite and widens the disparity of wealth.

If we are concerned with inequality, then competition law’s focus on efficiency needs to be relaxed in favour of other goals, which have distributional objectives. Competition goals that are more suitable to address inequality and alleviate income gaps would embrace distributional concerns through their focus on fairness and equality. They fit a market framing that desires fair competition; breaking away from the mould of perfect competition. Few countries, especially in the Global South, have managed to do so with the exception of South Africa which is one example of a country that managed to defy the dominant framing of competition policy and its perfect competition market structure.

South Africa stands out as it uses its competition law to ‘promote and maintain competition in the Republic in order to [among other goals] promote a greater spread of ownership, in particular, to increase the ownership stakes of historically disadvantaged persons’.^[69] South Africa’s competition policy is unique—not only is it contextualized to deal with its own history and entrenched systemic discrimination of the majority of its population—but also as it openly adopts a public interest framing to be able to address goals that do not fit the dominant framework of perfect competition. It does not shy away from seeking outcomes that stand in clear contradiction with proscriptions of efficiency and consumer surplus. Its Act, eg, states that merger analyses need to take into account ‘whether the merger can or cannot be justified on substantial public interest grounds’.^[70] The Act then lists the factors to assess when considering whether a merger can or cannot be justified on public interest grounds as follows:

12.A.(3) When determining whether a merger can or cannot be justified on public interest grounds, the Competition Commission or the Competition Tribunal must consider the effect that the merger will have on—

(a) a particular industrial sector or region;

(b) employment;

(c) the ability of small businesses, or firms controlled or owned by historically disadvantaged persons, to become competitive; and

(d) the ability of national industries to compete in international markets.^[71]

South African merger analysis has thus been broader than the mere focus on the efficiency effects of the merger.^[72] Taking into account these public interest considerations—not only distributes bargaining power and resources—but also broadens the reach of competition law to encompass industrial policy considerations. In doing that, what South Africa has done goes against the dominant discourse that competition authorities should only intervene in the market to assure efficiency. It also means that South Africans are sometimes willing to protect their national firms and are willing to pay a higher price for goods and services as a cost of including its historically excluded population into the marketplace—as well as for promoting national firms’ international export.

The question I raise in the last part of this paper is whether there is a way to square these goals of inclusion, industrial policy with equality concerns in a way that does not lead to a zero-sum game. In other words, how can these firms—that might have been allowed to merge and that are now in a more concentrated market position or are otherwise protected to further an industrial plan or export goals—be governed so that they do not extract higher surplus at the expense of consumers or workers that might be in a weakened bargaining position? Can public interest considerations, such as those proposed in South Africa, be pursued alongside a distributive mechanism that would shield consumers and workers from possible harms? A suggested way to do so is discussed next.

A. A Distributive Trust

I wish to propose a mechanism that I have explored in several of my writings as a way to distribute firm surplus back to consumers or workers.^[73] It is a proposal to incorporate distributive considerations in competition enforcement—particularly for countries in the Global South to allow the pursuit of an active industrial policy. This proposal challenges the dominant discourse surrounding the purpose of competition laws and becomes possible once we frame competition law as public interest law—basically when we look to South Africa for inspiration to see that competition laws could achieve more than market efficiency.

The gist of the proposed mechanism is to socialize the dominant enterprises and embed them within a wider network that comprises consumers/workers or simply citizens. The aim is to expand the dominant firms’ ownership to include the consumer/worker/citizen as a stakeholder earning part of the surplus or rent generated by the firm. This can be possibly undertaken through a direct redistributive plan: to force firms that are allowed a dominant position to channel part of their rents to the consumers who buy their products, their workers or those affected by their conduct in their various communities. The aim of the proposed redistribution plan is to curb the power of these dominant firms and to force them to redistribute part of the surplus value or rents back to the different stakeholders instead of prohibiting them from acquiring a dominant position.

Regulating the market through an ‘involuntary’ redistribution plan is thus the aim of this proposal. It takes for granted that weaker parties need protection and that their interactions on the markets are not free or voluntary. In that sense, it is inspired by Hale’s account of market coercions. It works like the public utilities regulations—at the turn of the century, where, eg, rates were fixed to limit the power of the natural monopolists, as in the case of Munn discussed above. This could be done through the requirement that dominant firms fund, eg, a consumer or worker trust from their surplus values that can in turn be selectively used to lower the prices paid by some consumers or to increase wages earned by labour. In economic terms, this proposal requires that the dominant firms fund this trust through fixed cost efficiencies realized when they acquire market power. And then these fixed cost efficiencies are translated into marginal cost reductions that directly benefit the consumers or workers.^[74]

Through the consumer or labour trust, consumers and labourers become de facto shareholders in the dominant enterprise who are owed dividends at a certain time. Or they become creditors who are owed their loans back at a certain time. Through the compulsory duty of funding the trust, the seller translates this loan into an investment benefiting the buyer in the trust. The mechanism can also be devised to allow for interest payable. If the firm fails to pay back its so-to-speak debts to the consumers or labours, then the competition authority may liquidate the firm and use the sold assets to repay them. This could be a driving force for the dominant entities to achieve cost efficiencies. It will also make the buyer or worker a stakeholder who is owed more than just compensation for the higher price they paid or lower wages earned.

This proposal does not aim to challenge ‘bigness’ per se. In that sense, I do not suggest a structuralist agenda as the neo-Brandesians do. On the contrary, it is open to accepting that concentrated markets might be a consequence of a desirable industrial policy they wish to pursue. It is also not challenging bigness to work with the given market structure that realistically defines our markets today, particularly in the Global South. It is, nonetheless, aiming to limit the inequality that dominant firms are responsible for. It is a proposal to regulate dominance, by working direct redistribution into the background rules of antitrust, to reduce inequality. The idea is that we need to change ‘the rules of the game’ itself—and not simply think of redistribution as an afterthought through the tax and transfer systems.

Counting only on taxation is highly problematic—redistributive taxes aim at correcting the inequalities, yet do not address the core of the problem—namely, the rules and structures that have generated, and will continue to generate, the inequalities in the first place. Moreover, redistributive taxes do not always reach the people who need them the most or those who are affected by the rules at the root of their inequalities. Therefore, changing the rules themselves will not only alleviate some of the inequalities of unregulated markets, but in the long-term are bound to change how the market functions, thereby reducing inequalities further.

The proposal to integrate a distributive trust alongside competition or industrial policies, although hypothetical at this stage, could gain momentum with new trends for firms to pursue stakeholder governance, popularized as environment, social and governance (ESG) goals.^[75] It could practically be framed to work within an ESG setup—as long as it aims at real distribution to counter market inequalities generated through different coercive powers.

The proposal of a ‘consumer trust’, and more generally thinking of competition law together with industrial policy and public interest considerations, is aiming at changing the coercive powers of the different market players, as Hale advocated 100 years ago. Here it is seeking to empower workers and communities who are affected by the dominant firm’s market position. This has serious ramifications for a competition policy that aims to work out alternatives that include the marginalized segments of society, industrial policy and at the same time aspires to alleviate poverty and raise equality and social justice in the Global South.

5. Conclusion

A central theme of this paper on competition law and policy in the Global South is the notion of coercion. It borrows from Robert L. Hale’s 1923 piece on coercion to show that countries in the Global South although often coerced to adopt competition laws and enforce them in ways that do not always suit their local needs, often due to global pressure, can use these laws to exert counter-coercion. Section 1 of the paper frames the analytics using Hale’s scholarship. Section 2 discusses the coercion witnessed by countries in the Global South, particularly regarding their adoption of competition laws. The discussion of competition enforcement allows us to also witness that there is room for strategic enforcement given the available and increasing resources at the enforcing competition agencies. Whether the merger enforcement practices illustrate continued coercive powers to rubber stamp approval on global mergers, or whether it shows a deliberate attempt by countries in the Global South to further concentrate their markets—despite calls to lower their market concentrations—is open for debate.

Section 3 of the paper turns to illustrate ways countries in the Global South could pursue forms of counter-coercion as a way of resistance to challenge the status quo, namely of competition law that aims to realize static allocative efficiency. This framing allows countries in the South to envision alternative policies that they could realize with their competition laws. For example, under these alternative configurations, they could broaden their competition policy to encompass goals of industrialization and distribution. This section discusses goals of industrialization that have been once pursued by many countries around the world—from the USA to Korea and Japan—and are currently witnessing an overt comeback in Western nations. This analysis concludes that it might be a ripe momentum for countries in the Global South wishing to pursue an industrial agenda alongside their competition policy.

With regards to distribution, Section 4 of the paper suggests that countries could envision the pursuit of a redistributive mechanism to allow the benefits accruing from an industrial policy to be shared by various stakeholders, particularly consumers and workers. This is proposed through a consumer/worker’s trust that would be funded from the surpluses generated by firms and distributed back to the various stakeholders. Framing competition law and policy wide enough to pursue these goals—of industrialization and distribution—widens our narrow understanding of the possible limits of competition law and policy. It is reminiscent of the competition policy pursued by South Africa where its competition law is implemented in a way to realize public interest considerations through a desire for a just distribution of ownership.

The issues discussed in this paper offer ways to reframe our debate around desirable competition law and policy in the Global South. On the one hand, it offers a critique of the status quo and of the coercion experienced in the implementation of these laws. On the other hand, it adopts a counter-coercion narrative to resist and challenge the status quo. This allows competition law and policy to be considered tools for social justice that go beyond our narrow concern for efficient markets. In this sense, the proposal is original in squaring competition law and policy with wider concerns of social justice, industrialization and distribution. It might offer an interesting agenda for countries in the Global South; a toolbox for resisting the status quo, and above all, a space for debating alternatives as a dereifying enterprise, the goal of which is ‘to show that we can do things in a number of different ways and ought to consciously choose among them, rather than merely submitting to the status quo’.^[76]

1. Robert L Hale, ‘Coercion and Distribution in a Supposedly Non-Coercive State’ (1923) 38 Pol Sci Q 470. ↑

2. Ibid 474. ↑

3. Morton J Horwitz, The Transformation of American Law, 1870-1960: The Crisis of Legal Orthodoxy (Oxford UP 1992) 33. ↑

4. Duncan Kennedy, ‘The Stakes of Law, or Hale and Foucault!’ in Sexy Dressing Etc. Essays on the Power and Politics of Cultural Identity (Harvard UP 1993) 83. ↑

5. Horwitz (n 3). ↑

6. Ibid. ↑

7. Ibid 195. ↑

8. Kennedy (n 4) 243. ↑

9. Horwitz (n 3) 196. ↑

10. Horwitz (n 3) 34. ↑

11. Ibid 195. ↑

12. Dina I Waked, ‘Adoption of Antitrust Laws in Developing Countries: Reasons and Challenges’ (2016) 12 JL Econ & Pol’y 193. ↑

13. Ibid 195. ↑

14. Ibid 198. ↑

15. Ibid. ↑

16. Bernard Hoekman, From Euro-Med Partnership to European Neighborhood: Deeper Integration À La Carte And Economic Development, ECES Working Paper No. 103, 6 (July 2005). ↑

17. Waked (n 12) (for a detailed account of why developing countries adopted competition laws.). ↑

18. Ibid 204. ↑

19. World Trade Organization, Paper of 18 September 1998, WT/WGTCP/W/80, (1998) (‘The specific benefits that have been attributed to such policy include promoting an efficient allocation of resources, preventing/addressing excessive concentration levels and resulting structural rigidities, addressing anti-competitive practices of enterprises […] enhancing an economy’s ability to attract foreign investment and to maximise the benefits of such investment, reinforcing the benefits of privatisation and regulatory reform initiating and establishing a focal point for the advocacy of pro-competitive reforms and a competition culture’.). ↑

20. Ajit Singh and Rahul Dhumale, ‘Competition Policy, Development and Developing Countries’, (1999) 7 TRADE Working Papers, 3. ↑

21. OECD, Promoting Pro-poor Growth: Policy Guidance for Donors (OECD Publishing 2007) 87. ↑

22. Waked (n 12) 221; see also Michal S Gal, ‘The Cut and Paste of Article 82 of the EC Treaty in Israel: Conditions for a Successful Transplant’ (2007) 9 Eur JL Reform 467. ↑

23. These data were collected as part of my doctoral (SJD) studies at Harvard Law School and its details can be found in my dissertation: Dina Waked, ‘Antitrust Laws in Developing Countries: An Empirical Analysis of the Reasons and Effects of Enforcement and Non-enforcement’ (Harvard Law School thesis 2012). I have since updated this database and currently working on a forthcoming empirical paper presenting it. Data are available upon request. ↑

24. Many countries across the Global South activate merger control after other enforcement aspects of the competition laws are in force. For example, India delayed merger control for several years after enforcement had been put in place. This was often done to allow the reorganization of the private sector, which was to a large extent slowly emerging from state control. The countries analysed here have activated their merger review—yet this might have been after other enforcement activities. ↑

25. Paul Cook, ‘Competition Policy, Market Power and Collusion in Developing Countries’ (Working Paper Series Centre on Regulation and Competition 2002); Michal S Gal, ‘Size Does Matter: The Effect of Market Size on Optimal Competition Policy’ (2000–2001), 74 S Cal L Rev 1437, 1445 (argues that because of the low demand in small economies and the need for firms to achieve minimum efficient scale of production (MES) to be able to operate efficiently (at lowest cost), the market will not be able to support more than a few number of firms). ↑

26. See Dina I Waked, ‘Antitrust Goals in Developing Countries: Policy Alternatives and Normative Choices’ (2014) 38 Seattle UL Rev 945 (for a discussion of these alternative goals). ↑

27. Joseph F Brodley, ‘The Economic Goals of Antitrust: Efficiency, Consumer Welfare and Technological Progress’ (1987), 62 NYU L Rev 1020, 1033 (‘Using the more precise language of economics, consumer welfare can be defined as consumer surplus, which is that part of the total surplus that accrues to consumers’.). ↑

28. Herbert Hovenkamp, ‘Distributive Justice and the Antitrust Laws’ (1982), 51 Geo Wash L Rev 1, 4 (quoting Phillip E Aree Da and Donald F Turner, Antitrust Law 103 (1978)). ↑

29. Jean Tirole, The Theory of Industrial Organization (MIT Press 1988) 20–21 (‘Weak assumptions about preferences and technological possibilities yield general results on competitive equilibrium. The best known of these may be the two fundamental welfare theorems. Roughly stated, the first says that a competitive equilibrium is Pareto optimal (i.e. a benevolent and fully informed social planner could not replace the competitive allocation of goods with another feasible allocation that would increase all the consumers’ welfare) and the second asserts that, under convexity assumptions (which rule out increasing returns to scale), any Pareto-optimal allocation can be decentralized (implemented by a market organization) by a choice of the right prices and an appropriate redistribution of income among consumers’.). ↑

30. Ibid. ↑

31. Alice H Amsden and Ajit Singh, ‘The Optimal Degree of Competition and Dynamic Efficiency in Japan and Korea’ (1994) 38 Eur Econ Rev 942–943. ↑

32. Louis Dembitz Brandeis, Other People’s Money: And How the Bankers Use it (1914). ↑

33. Ibid. ↑

34. See, eg, Lina M Khan, ‘Amazon’s Antitrust Paradox’ [2017] Yale LJ; Tim Wu, The Curse of Bigness: Antitrust in the New Guilded Age (Columbia Global Report 2018); Matt Stoller, Goliath: The 100 Year War Between Monopoly and Democracy (Simon & Schuster 2019); Jonathan Tepper and Denise Hearn, The Myth of Capitalism: Monopolies and the Death of Capitalism (Wiley 2018); Zephyr Teachout, Break ’Em Up: Recovering our Freedom From Big Ag, Big Tech and Big Money (All Points Books 2020); Barry Lynn, Cornered: The New Monopoly Capitalism and the Economics of Destruction (Wiley & Sons 2010). ↑

35. See, eg, Khan (n 34). ↑

36. Industrial policy refers to: strategic government intervention promoting its industrial sector through protectionism and targeted regulation aimed to encourage advantageous trade terms (exports), employment, growth and other development goals. ↑

37. CHIPS and Sciences Act of 2022. ↑

38. Fact Sheet: CHIPS and Sciences Act will lower costs, create jobs, strengthen supply chains and counter China (The White House, 9 August 2022) <https://www.whitehouse.gov/briefing-room/statements-releases/2022/08/09/fact-sheet-chips-and-science-act-will-lower-costs-create-jobs-strengthen-supply-chains-and-counter-china/> accessed 15 June 2023. ↑

39. Infrastructure and Jobs Act (2021–2022) <https://www.congress.gov/bill/117th-congress/house-bill/3684/text> accessed 15 June 2023. ↑

40. Remarks by National Security Advisor Jake Sullivan on Renewing American Economic Leadership at the Brookings Institution (The White House, 27 April 2023) <https://www.whitehouse.gov/briefing-room/speeches-remarks/2023/04/27/remarks-by-national-security-advisor-jake-sullivan-on-renewing-american-economic-leadership-at-the-brookings-institution/#:~:text=To%20build%20capacity%2C%20to%20build,natural%20disasters%20and%20geopolitical%20shocks> accessed 15 June 2023. ↑

41. Ibid. ↑

42. As a group of farmers known as the Grange (The National Grange of the Order of Patrons of Husbandry) had lobbied for their passing to combat rising prices after the Civil War. ↑

43. Barbara Fried, The Progressive Assault on Laissez Faire: Robert Hale and the First Law and Economics Movement (Harvard UP 1998) 160. ↑

44. Munn v Illinois, 94 US 113 (1877). ↑

45. Harry M Trebing, ‘Public Utility Regulation: A Case Study in the Debate over Effectiveness of Economic Regulation’ (1984) 18 J Econ Issues 223, 225. ↑

46. Munn v Illinois, 94 US 113 (1877). ↑

47. Trebing (n 47) 226. ↑

48. Ibid. ↑

49. W Frederic Foster, ‘The Doctrine of the United States Supreme Court of Property Affected by a Public Interest, and Its Tendencies’ (1985) 5 Yale LJ 49, 79 (‘If this were the principle, the doctrine would undoubtedly be socialistic, for it would sanction the doctrine that when the benefit to the public created by a private business became sufficiently large, the public might claim an interest in it to the detriment of the owner. But it is suggested that in this case the public interest was not created by the benefit derived from the business, but by the injury resulting from it. The exact words used were: ’When, therefore, one devotes his property to a use in which the public has an interest, he, in effect, grants to the public an interest in that use’.’). ↑

50. Ellis W Hawley, The New Deal and the Problem of Monopoly: A Study in Economic Ambivalence (Fordham UP 1995) 476. ↑

51. Ibid. ↑

52. Spencer Weber Waller, ‘The Antitrust Legacy of Thurman Arnold’ (2004), 78 St John’s L Rev 569, 572. ↑

53. Rudolph J Peritz, Competition Policy in America: History, Rhetoric, Law (Oxford UP 1996) 117. ↑

54. Hawley (n 50) 130. ↑

55. Ha-Joo Chang, Kicking Away the Ladder: Development Strategy in Historical Perspective (Anthem P 2003) 91. ↑

56. Ibid. ↑

57. Ibid. ↑

58. Ibid. ↑

59. European Commission Decision 84/380/EEC of 4 July 1984, Synthetic fibres, OJ 1984, L 207/17. ↑

60. Amsden and Singh (n 31). ↑

61. Ibid. ↑

62. Ibid 945. ↑

63. Ibid. ↑

64. Ibid. ↑

65. Ibid. ↑

66. Ibid 944 (quoting D I Okimoto, Between the Miti and the Market 12-13 (1989)). ↑

67. Michael E Porter, ‘Competition and Antitrust: Towards a Productivity-based Approach to Evaluating Mergers and Joint Ventures’ (2001) 46 Antitrust Bull 931–932 (‘When local rivalry is muted, a nation pays a double price. Not only will companies face less pressure to be productive, but the business environment for all local companies in the industry, their suppliers and firms in related industries will become less productive. This demonstrates in particular the danger in arguments about the creation of “national champions” in an industry in the home country in order to gain the scale to compete internationally. Unless a firm is forced to compete at home, it will usually quickly lose its competitiveness abroad’.). ↑

68. See, e.g. Louis Kaplow and Steven Shavell, ‘Why the Legal System is Less Efficient than Income Tax in Redistributing Income’ (1994), 23 J Legal Stud 667, 675 (‘[…] [the] normative economic analysis of legal rules should be primarily concerned with efficiency rather than distribution of income’.). ↑

69. South African Competition Act, Act No. 89 of 1998, ch. 1, para. 2(f) (S. Afr.). ↑

70. Ibid s 12.A(1). ↑

71. Ibid s 12.A.(3) ↑

72. See Thalalolwazi Msutu unpublished manuscript where he discusses three seminal merger cases that were shaped by the South African public interest doctrine namely the 2012 Minister of Economic Development and Others v Competition Tribunal and Others and in the matter between South African Commercial, Catering and Allied Workers Union v Wal-Mart Stores Inc. and Massmart Holdings Limited 110/CAC/Jul11 and 111/CAC/Jun11 (the ‘WalMart/Massmart merger’); 2021 ECP Africa Fund IV LLC and Others and Competition Commission of South Africa in re: the intermediate merger between ECP Africa Fund IV LLC, ECP Africa Fund IV A LLC and Burger King (South Africa) RF Proprietary Limited, Grand Foods Meat Plant Proprietary Limited IM053Aug21 (the ‘Burger King merger’); Constitutional Court (the ‘CC’) judgment from 2021 in Competition Commission of South Africa v Mediclinic Southern Africa (Pty) Limited and Another [2021] ZACC 35 (the ‘Mediclinic merger’). ↑

73. See Dina I. Waked, ‘Antitrust as Public Interest Law: Redistribution, Equity, and Social Justice’ (2020) 65 Antitrust Bull 87–101. ↑

74. See Einer Elhauge and Damien Geradin, Global Competition Law and Economics (2nd edn. Hart Publishing 2011) 1004–05 (‘[I]f the dollar gains to the merging parties exceed the dollar losses to consumers, one would think the merging parties could devise some mechanism to transfer enough of their gain to consumers to offset any losses to those consumers. … Another possibility would be to allow firms to create some sort of consumer trust. For example, if the objection to a merger efficiency is that it lowers fixed costs but not marginal costs, then merging firms could create a trust, funded out of their reduction in fixed costs, that pays merged firm a dollar sum for every unit they sell. In this way, the trust could convert a reduction in the firms’ fixed costs into a reduction in their marginal costs. If the concern is that the merging firms will not pass on a sufficient share of the reduction in their marginal costs to make consumers better off, the trust could pay consumers a sum for every unit they purchase. … Whatever the details, one would think merging firms with large net efficiency gains in the offing could put together some sort of Coasian deal that makes them better off without harming consumers, unless the transaction costs of doing so are so large they exceed the net efficiency gain’.). ↑

75. The term ESG was popularized with the publication of the UN Global Compact’s Report, referring to three types of risks, initiatives and policies that companies should follow: namely the environment, social concerns and governance; see UN Global Compact’s Report, ‘Who Cares Wins: Connecting Financial Markets to a Changing World’ (UNEPI, 2004) <https://www.unepfi.org/fileadmin/events/2004/stocks/who_cares_wins_global_compact_2004.pdf> accessed 20 July 2023. ↑

76. Duncan Kennedy, ’The Role of Law in Economic Thought: Essays on the Fetishism of Commodities’ (1985) 34 Am UL Rev 939, 994. ↑