Coase-Sandor Institute for Law & Economics Research Paper Series

Publication Date

2025

Publication Title

Coase-Sandor Working Paper Series in Law and Economics

Abstract

A large body of evidence suggests that open, competitive markets are a key driver of economic development. In recognition of this fact, many of the world’s leading economies not only adopted their own antitrust laws to promote fair competition, but they also urged developing countries around the world to do the same. This resulted in a remarkable proliferation of global antitrust law over the last several decades. Many studies have empirically examined the effect of this development, and, consistent with the hopes of policymakers, they have largely found that adopting antitrust laws produces positive economic outcomes.

In this Article, we reassess the relationship between countries’ antitrust laws and their economic growth. We improve on prior research by using more detailed data on countries’ antitrust regimes and deploying a research design that more accurately captures countries’ growth trajectories. This allows us to provide a more nuanced account of the relationship between antitrust law adoption and market outcomes. Our results suggest that, on average, antitrust laws have had little to no impact on economic development. But we also find evidence suggesting that these laws have a positive effect on economic development in countries that have adopted antitrust laws in situations that reflect a more genuine commitment to competition as opposed to following external pressures or incentives. Notably, we find that antitrust law is associated with increases in economic growth for countries that adopt antitrust laws without being required by a preferential trade agreement to do so. This suggests that domestic buy-in is critical for antitrust laws to foster economic growth. Our analysis thus reveals both the limits and the promise of antitrust law as a tool for economic development, helping us make sense of the past while guiding legislative reforms and enforcement efforts going forward.

Number

25-27

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