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Trading market access for competition policy enforcement

Author: Kamal Saggi; Bernard M Hoekman; World Bank.
Publisher: Washington, D.C. : World Bank, [2004]
Series: Policy research working papers (Online), 3188.
Edition/Format:   eBook : EnglishView all editions and formats
Summary:
Motivated by discussions at the World Trade Organization (WTO) on multilateral disciplines with respect to competition law, Hoekman and Saggi develop a two-country model that explores the incentives of a developing country to offer increased market access (by way of a tariff reduction) in exchange for a ban on foreign export cartels by its developed country trading partner. They show that such a bargain is feasible  Read more...
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Material Type: Internet resource
Document Type: Internet Resource, Computer File
All Authors / Contributors: Kamal Saggi; Bernard M Hoekman; World Bank.
OCLC Number: 54047153
Notes: Title from title screen as viewed on January 16, 2004.
"January 16, 2004."
Description: 1 online resource.
Details: Mode of access: World Wide Web.
Series Title: Policy research working papers (Online), 3188.
Responsibility: Kamal Saggi and Bernard Hoekman.

Abstract:

Motivated by discussions at the World Trade Organization (WTO) on multilateral disciplines with respect to competition law, Hoekman and Saggi develop a two-country model that explores the incentives of a developing country to offer increased market access (by way of a tariff reduction) in exchange for a ban on foreign export cartels by its developed country trading partner. They show that such a bargain is feasible and can generate a globally welfare-maximizing outcome. The authors also explore the incentives for bilateral cooperation when the developing country uses transfers to "pay" for competition enforcement by the developed country. A comparison of the two cases shows that there exist circumstances in which the stick (the tariff) is more effective in sustaining bilateral cooperation than the carrot (the transfer). Furthermore, the scope for cooperation is maximized when both instruments are used. An implication of the analysis is that developing countries have incentives to support an explicit WTO prohibition of export cartels. This paper--a product of Trade, Development Research Group--is part of a larger effort in the group to analyze issues on the agenda of the WTO.

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