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Antitrust Law and the Promotion of Democracy and Economic Growth

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  • Niels Petersen

    (Max Planck Institute for Research on Collective Goods, Bonn)

Abstract

There is a considerable debate in the legal literature about the purpose of antitrust institutions. Some argue that antitrust law merely serves the purpose of economic growth, while others have a broader perspective on the function of antitrust, maintaining that the prevention of economic concentration is an important means to promote democratization and democratic stability. This contribution seeks to test the empirical assumptions of this normative debate. Using panel data of 154 states from 1960 to 2007, it analyzes whether antitrust law actually has a positive effect on democracy and economic growth. The paper finds that antitrust law has a strongly positive effect on the level of GDP per capita and economic growth. However, there is no significant positive effect on the level of democracy. It is suggested that these results might be due to the current structure of existing antitrust laws, which are designed to promote economic efficiency rather than to prevent economic concentration.

Suggested Citation

  • Niels Petersen, 2011. "Antitrust Law and the Promotion of Democracy and Economic Growth," Discussion Paper Series of the Max Planck Institute for Behavioral Economics 2011_03, Max Planck Institute for Behavioral Economics.
    • Handle: RePEc:mpg:wpaper:2011_03
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    References listed on IDEAS

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    1. Torsten Persson & Guido Tabellini, 2006. "Democracy and Development: The Devil in the Details," American Economic Review, American Economic Association, vol. 96(2), pages 319-324, May.
    2. Dutz, Mark A. & Vagliasindi, Maria, 2000. "Competition policy implementation in transition economies: An empirical assessment," European Economic Review, Elsevier, vol. 44(4-6), pages 762-772, May.
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