RELEVANCE OF COMPETITION REFORMS
FOR DEVELOPMENT IN AFRICA:
Freer Markets for the People
Professor Eleanor M. Fox
New York University School of Law
Dakar 6-7 August 2010
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outline
• 1 Globalization, promises and challenges
• 2 The CUTS 7Up Projects as blueprint
• 3 The challenges to be met
– a. Fighting restraints coming from outside
• Trade, competition
– b. Fighting restraints coming from inside
• Trade, competition, governance
– c. What can the competition authority do?
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1 Globalization, Progress, Challenge
• Opening of opportunities; appreciation of the
benefits of integration
• Africa has made progress in growth
– “From 2000 to 2008, African economies grew at twice
the pace than .. in the 1980s and 1990s”
• Those with natural resource wealth grew at 5.4%/yr
• Others grew at 4.6%
– Even in 2009, African nations grew 1.4%
 NYT 24 June 2010, quoting McKinsey study
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But not all African economies get
the advantage
• The special problems of the bottom billion
(Paul Collier, 2007)
• Plagued by bad governance, corruption, some
land-locked, scarce resources, income inequality
exacerbated by commodity exporting, insufficient
education and infrastructure, bad economic policy
 and
the opportunities opened by freer trade have
been filled by better situated countries
• Prescriptions commonly include aid
– Question: Can the African countries be helped in their growth
and development by competition policy and law, and how?
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2. 7Up, starting from ground up
• Good competition law and policy are important
ingredients in growth and development
• But what is “good”?
• The error of much of the world has been to assume that
– 1 What is good for the developed world is good for the
developing world
– 2 Liberalization and minimalist antitrust intervention are “good”
– Sometimes this is so, but ….
CONTEXT MATTERS
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The 7 Up projects
• The 7 Up projects are remarkable for their
attention to context
– Political, social and economic
– With thick descriptions of institutions, resources and powers,
FDI and cross-border activity; structure of markets and
concentration; sectoral regulation
– The facts: the restraints and abuses that harm the nation’s
consumers and hold back entrepreneurs from competing on
merits; country case studies, sector case studies
• Starting with: Pulling Up our Socks
• CUTS has provided the platform and blueprint for getting
a pragmatic grip on what is good policy
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3. The Challenges to be met
• The competition authority wants to protect
competition on the merits; to protect all of the
forces that inspire rivalry and good performance
and bring lower prices, new products
• But they are faced with undermining forces from all sides
• Foreign firms that try to exploit, exclude, monopolize
• Foreign governments that want to help their firms
• Domestic firms that get special privileges and have power
• Their own governments’ privileged SOEs, favored lobbyists

and even good-willed bad policy
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3.a. Fighting off restraints coming
from outside
• Not so many years ago when the industrialized
•
countries were asked about developing countries
and competition they would answer: They are
hurting us. They have commodity cartels.
Today it is well recognized that the developed
countries are hurting the developing world and
keeping them from developing
– Subsidies and anti-dumping laws
– World cartels against the most vulnerable
– Deals by MNEs who get privileges in return for FDI
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3.b. Fighting off restraints coming
from inside
• Cronyism, corruption and privilege, often
•
•
•
blocking the opportunities necessary for
competition
Lobbying: insiders (and outsiders) get
government measures
Bureaucrats enact excessive regulation
All of these restraints hurt competition, growth
and development
– They hold back good performers from doing what
they can do best
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3.c. What can the competition
authority do?
• 1 Get the facts
– This is more simply said than done
• Sometimes it requires coordination with other authorities, crossborder or across the world
• 2 Advocacy
• The power of persuasion; strong sound arguments against bad
economic policy, with facts showing the costs
• 3 Enforcement
• 4 Telling stories
– Sharing the success stories, see http://www.usaid.gov/stories/;
http://www.usaid.gov/regions/afr/success_stories/zambia.html#story2
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CONCLUSION
• Constructing and safeguarding a
competitive environment is one essential
ingredient to growth and development
• The job is hard; it takes:
– The
– The
– The
– The
facts
perspective
voice
resources, credibility and authority
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