THE EFFECTIVENESS OF COMPETITION LAW IN PROMOTING ECONOMIC DEVELOPMENT

Enforcement of competition law canpromote economic development indeveloping countries. Competition lawcan stimulate economic developmentthrough its impact on intensity of competition and through a signaling effect toinvestors and entrepreneurs. There is evidence that a country that has enacted andapplied a competition law has on average ahigher GDP per capita than a countrywithout a competition law. This quantitativeimpact is half as large as the impactof an institutional variable such as rule of law. The characteristics of competitionlaw also matter.De factoindependence of the competition agencies and thesubstantive contents of the law matter for economic development.