Contestability and economic integration in Western Hemisphere
This paper discusses the harmonization of competition policies in the Western
Hemisphere. Using the theory of contestable markets, it presents an analytical framework
that shows the requirements for achieving coherence among the different policies that
affect the competition process. According to that theory, the normative parameters for
monitoring the conduct of the business community should be subordinated to some special
characteristics of each industry, namely, the ratio transaction costs/production costs, the
nature of entry barriers, and the interplay between existing technologies and the market size.
This approach would allow the immediate involvement of all 34 OAS member countries
in the effort toward the convergence of competition policies in the Western Hemisphere,
regardless of the status of national antitrust laws. Indeed, the only requirement for participating in that effort is a reliable data base that would describe the current conditions
of competition in each economy.
JEL Classification: F15; L13.
Keywords: Contestable market competition economic integration