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Competition policy implementation in transition economies: an empirical assessment
Between 1990 and 1996, competition laws have been adopted in 22 of the 26
transition economies of central and eastern Europe and the former Soviet
Union. Yet there is very little systematic evidence about implementation
experience, and none regarding its impact on intensity of economy-wide
competition. The novelty of this paper is twofold. First, it defines a range
of competition policy implementation criteria relevant for transition and
developing economies along the three main dimensions of enforcement,
competition advocacy and institutional effectiveness. These classification
criteria go significantly beyond the traditional emphasis on abuse of
dominance, agreement and merger cases. Second, it provides an assessment of
the effectiveness of competition policy implementation across 18 countries
along these criteria, based on data from each country’s competition
authorities and supplemented with assessments by legal practitioners. The
relationship between competition policy and intensity of competition is
explored, with the latter captured by a measure of economy-wide enterprise
mobility that reflects selection effects. We find a robust positive
relationship between effective competition policy implementation and expansion
of more efficient private firms.
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