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The Deterrent Effects of National Anti-Cartel Laws: Evidence from the International Vitamins Cartel


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  • Clarke, Julian L.
  • Evenett, Simon J.


This paper estimates the effect on international trade flows during the 1990s of the formation of the vitamins cartel. After this cartel began operating, exports from countries where the cartel conspirators' headquarters were located to those nations in Asia, Western Europe, and Latin America that did not have active cartel enforcement regimes tended to rise in value more than in those nations that had such regimes. As industry studies suggest that the demand for vitamins is price inelastic, this finding is supportive of the hypothesis that the vitamins cartel raised prices further in nations without active cartel enforcement regimes. These findings also have implications for the cost-benefit analyses of anti-cartel laws. In nine economies in Western Europe and Latin America, where recent estimates of government outlays on competition policy enforcement were found, these expenditures were compared to the additional overcharges on vitamins imports that would have resulted if each of these nations did not have an active cartel enforcement regime. In seven of the nine economies, the reduction in overcharges on this one international cartel alone exceeded a quarter of their government's spending on the entire competition policy enforcement regime. These findings have a direct bearing on the debate, currently taking place at the World Trade Organization, on the merits of multilateral disciplines that would require all WTO members to enact and enforce provisions against hard core cartels.

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Bibliographic Info

Paper provided by Regulation2point0 in its series Working paper with number 131.

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Date of creation: Dec 2002
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Handle: RePEc:reg:wpaper:131

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Cited by:
  1. Jacob Kol & L. Winters, 2003. "Reconvering from Cancún: the EU responsibility," Intereconomics: Review of European Economic Policy, Springer, vol. 38(6), pages 339-345, November.
  2. Connor, John M., 2005. "Extraterritoriality of the Sherman Act and Deterrence of Private International Cartels," 2005 Annual meeting, July 24-27, Providence, RI 19499, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  3. Buccirossi, Paolo & Ciari, Lorenzo & Duso, Tomaso & Spagnolo, Giancarlo & Vitale, Cristiana, 2011. "Competition policy and productivity growth: An empirical assessment," DICE Discussion Papers 22, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
  4. Hüschelrath, Kai & Veith, Tobias, 2011. "The impact of cartelization on pricing dynamics: Evidence from the German cement industry," ZEW Discussion Papers 11-067, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  5. John Connor, 2006. "Effectiveness of Antitrust Sanctions on Modern International Cartels," Journal of Industry, Competition and Trade, Springer, vol. 6(3), pages 195-223, December.
  6. Barros, Pedro Pita & Clougherty, Joseph A & Seldeslachts, Jo, 2007. "Remedy for Now but Prohibit for Tomorrow: The Deterrence Effects of Merger Policy Tools," CEPR Discussion Papers 6437, C.E.P.R. Discussion Papers.
  7. Pedro P. Barros & Joseph A. Clougherty & Jo Seldeslachts, 2009. "How to Measure the Deterrence Effects of Merger Policy: Frequency or Composition?," CIG Working Papers SP II 2009-13, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG), revised Oct 2009.
  8. James F. Nieberding, 2006. "Estimating overcharges in antitrust cases using a reduced-form approach: Methods and issues," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 361-380, November.
  9. Bolotova, Yuliya V., 2009. "Cartel overcharges: An empirical analysis," Journal of Economic Behavior & Organization, Elsevier, vol. 70(1-2), pages 321-341, May.
  10. Fiammetta Gordon & David Squires, 2008. "The Deterrent Effect of UK Competition Enforcement," De Economist, Springer, vol. 156(4), pages 411-432, December.
  11. Andrés Rius & Gabriel Katz, 2004. "¿Qué Imitar de las Economías Pequeñas Exitosas? Sobre la Necesidad de una Política y una Legislación de competencia," Documentos de Trabajo (working papers) 0804, Department of Economics - dECON.


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