Page 33 - Azerbaijan State University of Economics

THE ROLE OF COMPETITION ADVOCACY IN TRANSITION AND DEVELOPING ECONOMIES

the law may be silent about the role of the competition agency in such

areas. Unless the law forbids participation by the competition agency,
however, the agency should, through its law enforcement role, actively

seek opportunities to state the case for competition in the public forum.
This has been largely the practice in France, Germany, and the United

States, for example. It is unlikely that any other party would do so, or be

as effective. The benefits to the economy and to consumers from effec-
tive competition advocacy are almost certainly to be significant, at least

as great as those from more traditional competition enforcement.
There is also a role for competition advocacy in the broader, public

arena. The successful establishment of a market economy requires the

existence of a competition culture within the country. Both consumers
and the business community must have an awareness of competition

policy and an understanding of how it will benefit them. The competition
agency has an important role in this educational process. In many

countries the public does not have significant experience with
competition policy or an appreciation of the benefits that flow from the

process of competition. Moreover, the first experience many individuals

have with free markets, especially in countries in transition from planned
economies, is likely to be negative, not positive. With liberalization of

markets often comes disruption, as misallocated and inefficient assets are
cast aside and jobs are lost, and prices of some products, formerly

controlled, rise abruptly to market levels. Under these circumstances the
competition agency's task of building public support for competition

policy is especially challenging.

The business environment in which firms operate is conditioned by
many economic policies. The degree of competition in an economy can be

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