Identifying and Overcoming Political Economy and Governance Constraints to the Effective Implementation of Competition and Regulatory Laws

Since the advent of economic and political liberalisation in most developing countries following the collapse of the Centralised Economic principles in the 1990s, there have been considerable policy changes, with increased reliance being placed on market forces.

Further, regionalisation and globalisation of the world has made markets anywhere in the world contestable. There is therefore the inherent need for developing countries, to adopt the most plausible and pragmatic designs for their competition and regulatory laws. Markets in many developing economies tend to be highly concentrated and thus may have the prevalence of collusive tendencies. This scenario would facilitate the exercise and abuse of market power and precipitate other anti-competitive conduct in both individual developing countries and surrounding countries. While competition and regulatory laws may be in place to ensure that certain minimum standards are complied with, unfortunately, the political economic policies of Government do often have a toll on the effectiveness of implementing competition and other regulatory laws.

At the moment, most developing and least developed countries have passed the stage of contemplating whether they would want to have a competition or other regulatory law or not, but rather have reached the stage where the debate on the matter is how to structure their laws, and how best to implement an effective enforcement regime.

The purpose of this paper is to highlight the political-economic and governance issues that constrain the effective implementation of competition and regulatory laws, with particular attention paid to the existing Government policy. The paper seeks to identify the constraints and where possible, suggest strategies and tactics of operating within the helm of such constraints before narrowing down on recommendations on policy reform. The study also hopes to highlight the need and importance of having political support for competition and regulatory laws. The study also hopes to highlight the need and importance of having a strong political support for competition and regulatory laws, with country examples from the Common Market for Eastern and Southern Africa (COMESA).