Antitrust in a developing economy : the case of Venezuela

Antitrust policy can be a valuable part of the legal framework supporting an open, market-oriented economy. Antritrust, properly conceived and executed, can promote competition, inhibit collusion, and discourage or prevent monopoly. In so doing, antitrust encourages greater efficiency, improved uses of resources, superior performance, and lower prices for consumers. However, an open trade and investment regime is not a substitute for an antitrust policy. There are risks to an antitrust policy; an overzealous, poorly focused, or poorly administered policy could be counterproductive. This report contains: a broad discussion of the role that an antitrust law can play in a market-oriented, developing economy; an overview of a proposed antitrust law under consideration in Venezuela and a summary of its strengths and weaknesses; and recommendations for changes and improvements in the draft law that would enhance its role in promoting competition and efficiency. While much of the paper is directed toward a specific proposal, its general analytic underpinnings are broadly applicable to any developing economy.