Page 32 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE

buttress against lobbying and economic rent-seeking behavior by various

interest groups. And it can foster greater accountability and transparency
in government economic decision-making and promote sound economic

management and business principles in both the public and private sectors.
There is a direct relationship between competition advocacy and

enforcement of a competition law, and the connection is especially

strong in transition and developing economies. Many markets in
developing and transition market economies initially tend to be highly

concentrated, and sometimes dominated by a single or a few large firms
that engage in anticompetitive business practices or lobby the govern-

ment for special favors. The aim of competition advocacy is to foster

conditions, in particular framework conditions that will lead to a more
competitive market structure and business behavior without the direct

intervention of the competition authority. The more unpalatable
alternative is for the competition authority to exercise close and

continual supervision of the dominant firms under the competition law.
This alternative is more resource intensive, and the results less

satisfactory. It represents a return to broad government intrusion in the

marketplace, reminiscent of the systems that governments in emerging
market economies are leaving behind.

There may be both an explicit, statutory basis for the competition
agency's competition advocacy functions and an implied or informal

basis. The laws of some countries, such as Canada, Italy, the Republic of
Korea, the Russian Federation and the Republic of Azerbaijan, give the

competition agency a specific mandate to submit its views on particular

matters to the appropriate ministry or regulatory agency, for example, on
the restructuring of the telecommunications industry. In other countries

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