Relevance of Competition Reforms
for Development in Africa
David Lewis
Gordon Institute of Business Science
Underdeveloped Markets
• Development economics emphasised market failures
 Infant industries/trade protection
 State owned enterprises
 National industrial strategies
 Suppression of agricultural markets
• Competition law and policy
 1st World (USA) preoccupation
 1st World ‘luxury’
 How to ‘substitute’ for markets, not promote markets
Development Model Reconsidered
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Corruption and inefficiency
Poor governance
Low development returns
Collapse of Berlin Wall
GAVE RISE TO
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Domestic market liberalisation - privatisation/ deregulation
International trade liberalisation – reduced tariff barriers/exports
Democratic governance
New ‘rules of game’ required
But still strong support for state – Asian NIC’s, China
CLP sometimes imposed; sometimes embraced
Relevance of Competition Reforms
MACRO PERFORMANCE
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Strong global growth performance
But growing in-country and between-country inequality
Many major setbacks – financial and economic crises
And important ‘exceptions’ – eg. access to agricultural markets
Which limit reforms – Doha Round
BUT MARKETS RULE, THOUGH CONTINUED REGARD FOR STRONG STATE
ROLE, SO...
 Relevance of CP axiomatic – boundaries between state and market,
regulation
 Relevance of CL axiomatic – maintain open markets in face of economically
strengthened elites
Micro Performance
 Usually very difficult to measure micro outcomes
 But constituency for CLP depends on visible outcomes – ‘it’s context, stupid’
 Select reforms and enforcement that are winnable and impactful
 Telecommunications – powerful new technologies, great diffusion
 Basic commodities – pro-poor
 Local markets – pro-poor
 Public procurement – pro-taxpayer and treasury
 Design imaginative, impactful remedies
 Don’t only focus on enforcement
 Mergers – reputation for strength and competence
 Advocacy
 Public anti-competitive conduct
 Performance of regulators and SOEs