Competition and the State (Global Competition Law and Economics) - Hardcover

Hardcover

ISBN 10: 0804789398 ISBN 13: 9780804789394

Verlag: STANFORD LAW BOOKS, 2014

Inhaltsangabe

Competition and the State analyzes the role of the state across a number of dimensions as it relates to competition law and policy across a number of dimensions. This book re-conceptualizes the interaction between competition law and government activities in light of the profound transformation of the conception of state action in recent years by looking to the challenges of privatization, new public management, and public-private partnerships. It then asks whether there is a substantive legal framework that might be put in place to address competition issues as they relate to the role of the state. Various chapters also provide case studies of national experiences. The volume also examines one of the most highly controversial policy issues within the competition and regulatory sphere—the role of competition law and policy in the financial sector.

This book, the third in the Global Competition Law and Economics series, provides a number of viewpoints of what competition law and policy mean both in theory and practice in a development context.

Über diesen Titel

Über die Autorin bzw. den Autor

Thomas K. Cheng is Associate Professor of Law at the University of Hong Kong.Ioannis Lianos is the City Solicitors' Trust Reader in Competition and European Union Law at the Faculty of Laws, University College London.D. Daniel Sokol is Associate Professor of Law at the University of Florida Levin College of Law.

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Competition and the State

By Thomas K. Cheng, Ioannis Lianos, D. Daniel Sokol

STANFORD UNIVERSITY PRESS

Copyright © 2014 Board of Trustees of the Leland Stanford Junior University
All rights reserved.

ISBN: 978-0-8047-8939-4

Contents

Contributors, 
Introduction, 
PART I: CONCEPTUALIZING AND RE-CONCEPTUALIZING THE INTERACTION BETWEEN COMPETITION LAW AND GOVERNMENT ACTIVITIES, 
1. Privatization and Competition Policy (Alexander Volokh), 
2. Toward a Bureaucracy-Centered Theory of the Interaction between Competition Law and State Activities (Ioannis Lianos), 
3. Competition Issues and Private Infrastructure Investment through Public-Private Partnerships (R. Richard Geddes), 
PART II: IS THERE A NEED FOR A SPECIFIC SUBSTANTIVE LEGAL FRAMEWORK IN DOMESTIC AND INTERNATIONAL COMPETITION LAW?, 
4. State-Owned Enterprises versus the State: Lessons from Trade Law (Wentong Zheng), 
5. What Drives Merger Control? How Government Sets the Rules and Play (D. Daniel Sokol), 
6. Antitrust Enforcement and Regulation: Different Standards but Incentive Coherent? (Alberto Heimler), 
7. International Law and Competition Policy (Paul B. Stephan), 
8. The Foreign Trade Antitrust Improvements Act: Further Limitations on the Ability of the Antitrust Regime to Promote Consumer Welfare (Joseph P. Bauer), 
PART III: JURISDICTIONAL EXPERIENCES, 
9. Competition Advocacy of the Korean Competition Authority (Dae-Sik Hong), 
10. Competition and the State in China (Thomas K. Cheng), 
11. State Aids in European Union Competition Law (Leigh Hancher and Francesco Salerno), 
12. Australian Experience with Competition Law: The State as a Market Actor (Deborah Healey), 
13. Merger Analysis and Public Transport Service Contracts (Philippe Gagnepain, Marc Ivaldi, and Chantal Latgé-Roucolle), 
Notes, 
Index, 

CHAPTER 1

Privatization and Competition Policy

Alexander Volokh

Why are we discussing privatization in a book about competition policy? Because the scope of government and the role of the state are central to broader issues of competition. Privatization of monopolies without sufficient antitrust protection has been a recurring complaint among critics of privatization. So, on the other side, has been anticompetitive behavior by state-owned enterprises that often are not subject to antitrust at all. More theoretically, antitrust law may focus on certain problems and choose to ignore others as being unrealistic because of an assumption that firms behave as profit maximizers. But given the mass of public choice literature exploring what governments supposedly maximize, as well as empirical evidence that privatization often increases productivity and profitability, this may be a bad assumption when firms are owned (or even heavily regulated) by government.

This chapter, therefore, explores the links between privatization and competition policy. First, in Section I, I explain why privatization is even relevant at all—a question economists paid surprisingly little attention to before a quarter-century ago. I survey theoretical models and empirical results, discuss the relevance (if any) of theory to policy, and show how privatization can be a catalyst for various forms of social change. Many policies are complementary to privatization, in the sense that the design of those policies systematically affects the effectiveness of privatization; two of the most important complementary policy areas are corporate governance and competition policy, and most generally, privatization works better when accompanied by liberalization. Moreover, since failures in both of these areas lead to distortions relative to the imaginary "perfectly competitive" outcome, good corporate governance and good competition policy are to some extent substitutes. I briefly address the connection between privatization and corporate governance in Section II and discuss at length the interplay between privatization and competition policy in Section III.

I. Privatization and Its Possible Irrelevance

A. Irrelevance?

Privatization has a long history. Peter Drucker advocated "reprivatization" in 1969, but the term privatize and its derivatives were used even earlier to refer to the sell-off of government assets in West Germany in the 1950s and in Nazi Germany in the 1930s and 1940s. Even before that, as far back as the 1920s, the term denationalization was used. And asset sales (or giveaways) and contracting out existed even before there was a word for them; vast public lands were privatized in the United States under the preemption and homestead acts of the mid-nineteenth and early twentieth centuries. Jeremy Bentham envisioned privately managed prisons in the late eighteenth century, and contracting out—in tax collection and many other public services—goes back to ancient Greece and the Roman Republic.

The history of the theory of privatization, though, is quite short. For much of its history, privatization was "a policy in search of a rationale." Early debates over privatization were unrigorous, and the era of economically sophisticated discussion of privatization probably began in 1987, when David Sappington and Joseph Stiglitz pointed out that, in a simple model, whether assets are owned publicly or privately is irrelevant.

To simplify their model slightly, suppose the government is considering whether it should own an asset. The asset produces a quantity Q, with valuation V (Q) (which could encompass any objectives, including distributional ones). The government could induce private providers to produce the optimal quantity by simply paying a price P (Q) = V (Q). (Many other contracts will do just as well—for instance, "Produce the optimal quantity Q* in exchange for a price that guarantees you zero economic profits, or we boil you in oil"—but the Sappington-Stiglitz proposal has the advantage that the government doesn't need to know costs.) The private provider would thus get paid the entire social benefit of his production, but the government can extract this rent byauctioning the right to produce among potential noncolluding risk-neutral suppliers with symmetric beliefs about the least-cost technology.

One might add that a government manager can be incentivized the same way with a wage W (Q) = V (Q), so all ownership modes are equivalent. Generalizing still further, Q could be multidimensional and indicate not just quantity but any attribute of how the business is run. Any public-sector rules can be imposed by contract or written into regulations; government enterprise, contracting out, and a regulated market are thus potentially equivalent in every way.

From this perspective, much of the conventional wisdom about privatization appears—if not wrong, at least undertheorized. Private firms may have better capital-market monitoring—but capital-market monitoring has its own problems, and why can't the government retain any advantages of such monitoring by only owning partial shares in firms? Private firms may have harder budget constraints, but why can't the government shut down failing agencies or, alternatively, as recent events remind us, bail out failing private firms? Private firms may have stronger profit-based incentives, but why can't the government simulate these using public-sector compensation schemes with high-powered incentives? (The last two questions combined could be summarized as "Why privatize when...

Details zur Ausgabe

• Verlag: STANFORD LAW BOOKS
• Erscheinungsdatum: 2014
• Sprache: Englisch
• ISBN 10: 0804789398
• ISBN 13: 9780804789394
• Einband: Gebundene Ausgabe
• Anzahl der Seiten: 290
• Herausgeber: Sokol D. Daniel, Cheng Thomas K., Lianos Ioannis
• Kontakt zum Hersteller: Nicht verfügbar
• Verantwortliche Person: preigu; mail@preigu.de; ; Lengericher Landstr. 19; Osnabrück; 49078; Deutschland