Competition policy implementation in transition economies: An empirical assessment

Between 1990 and 1996, competition laws have been adopted in 22 of the 26 t ransition economics of eastern Europe and the former Soviet Union. Yet ther e is very little systematic evidence about implementation experience, and n one regarding its impact on intensity of economy-wide competition. The nove lty of this paper is twofold. First, it defines a range of competition poli cy implementation criteria relevant for transition and developing economies along the three main dimensions of enforcement, competition advocacy and i nstitutional 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 competiti on policy implementation across 18 countries along these criteria, based on data from each country's competition authorities and supplemented with ass essments by legal practitioners. The relationship between competition polic y and intensity of competition is explored, with the latter captured by a m easure of economy-wide enterprise mobility that reflects selection effects. We find a robust positive relationship between effective competition polic y implementation and expansion of more efficient private firms. (C) 2000 El sevier Science B.V. All rights reserved. JEL classification. L4; K21; P2.