United Nations Conference on Trade and Development Merger Control in Developing Countries: Lessons from the Brazilian Experience

de Córdoba for their comments on early drafts of the paper. Errors are the responsibility of the authors. The views expressed in this report are those of the authors and do not necessarily reflect the views of the UNCTAD secretariat. UNCTAD/DITC/CLP/Misc.24 ii NOTE • Symbols of United Nations documents are composed of capital letters combined with figures. Mention of such a symbol indicates a reference to a United Nations document. • The views expressed in this volume are those of the authors and do not necessarily reflect the views of the United Nations Secretariat. The designations employed and the presentation of the material do not imply the expression of any opinion whatsoever on the part of the United Nations Secretariat concerning the legal status of any country, territory, city or area, or of its authorities, or concerning the delimitation of its function or boundaries. • Material in this publication may be freely quoted or reprinted, but acknowledgement is requested together with a reference to the document number. A copy of the publication containing the quotation or reprint should be sent to the UNCTAD secretariat at: INTRODUCTION When based on sound economic principles, the enforcement of antitrust policy is expected to enhance economic efficiency, improve consumer welfare and spur economic growth. This is one of the reasons why antitrust laws were adopted or updated as part of market-oriented reforms in several developing countries during the 1990s. 1 Achieving sound enforcement of antitrust laws in transition economies, nevertheless, is far from easy. The analytical exercise underlying most antitrust cases applies economic reasoning to predict the likely impact of business behaviour on competition and economic welfare, which is a rather complex effort, inevitably subject to some mistakes. The risk of perverse antitrust enforcement is not exclusive to developing countries but may be aggravated in those jurisdictions by low levels of expertise and the scarcity of human capital. 2 The quality of antitrust enforcement may also be affected by interventionist ideologies and politics. 3 Interventionist ideologies and political pressure also affect antitrust enforcement in mature jurisdictions. Unique to emerging economies, perhaps, is the fact that the benefits of open markets are yet to come, undermining public confidence in market reforms. Also unique is the great extent to which the historical relationship between the public and the private sectors extremely state capture in the present. 4 The hazards involved in the implementation of antitrust programs …