Introduction

• Author: Damien Geradin
• Profession: Professor of Law at the University of Liège and Director of the Global Competion Centre
• Pages: 13-16

Page 13

It is generally accepted that competition between firms is the best way to provide for an optimal allocation of resources, impose pressure on costs and stimulate innovation and consumer satisfaction (Gellhorn and Kovacic 1994). It is, however, possible that firms try to eliminate competition by adopting anticompetitive practices. For this reason, the adoption and implementation of competition rules is necessary. By preventing anticompetitive practices, the application of these rules contributes to economic efficiency, as well as to welfare maximization. Competition rules may also pursue other objectives. This is, for instance, the case in the European Community (EC) where one of the major objectives of competition law is to contribute to the creation of a single market. ¹

While competition law regimes have for a long period of time only been present in industrialized countries, a large number of emerging economies have now adopted domestic competition rules. It is estimated that, in 2002, more than 90 countries had enacted competition law regimes (Devellennes and Kiriazis 2002). The adoption of such regimes in emerging economies can be explained by a number of factors. First, some emerging economies have enacted competition rules in the framework of free trade agreements. Efforts to strengthen competition rules have thus been undertaken in the context of NAFTA and Mercosur. ² As will be seen below, the Association Agreements concluded between the EC and some Mediterranean countries also contain competition provisions. Second, institutional donors, such as the World Bank or regional development banks, generally encourage emerging economies to adopt competition law regimes and provide assistance to these countries in order to help them establish such regimes (Rodriguez and Coate 1996). Finally, a number of emerging economies realized that the implementation of fundamental economic reforms, such as the liberalization of State monopolies, had to be accompanied by the adoption of rules preventing anticompetitive practices (Jenny 2001).

Page 14

The development of competition laws in developing and emerging economies has received considerable academic attention. A large number of legal and economic studies have been written on the establishment of competition laws and institutions in countries of Central and Eastern Europe (CEECs) (Fingleton etal. 1996), Latin America (Bomchil and Den Toon 1996, Vieira and Aquino 1996, Fernandez 1996, De Leon 1999, and Oliveira 1998), and Asia (Yun 1999 and Abir 1996). This paper looks at the development of competition law regimes in Northern Africa and the Middle East, an issue which is still relatively unexplored. Specifically, it...