Abstract

Post-World War II international trade liberalization has eliminated many border restrictions and spurred economic growth. Nevertheless, there are certain types of activities with substantial negative implications for trade and competition that are not truly subject to national or international trade and competition strictures—these are in effect, “ungoverned spaces.” These harmful activities are the fruit of anticompetitive market distortions (ACMDs)—rules imposed by the state that distort competitive interactions and, frequently, trade flows. Sanctioned by governments, ACMDs are far more difficult to combat than purely private restrictions. Recent scholarly studies highlight the magnitude of the harm generated by ACMDs. One promising approach to curb ACMDs involves empowering government officials who support regulatory reform (for example, antitrust policymakers) to intervene with other organs of government in order to encourage the eradication or curbing of ACMDs. The growth of internet-enabled business platforms, which are far better able to evade governmental limits on competition than traditional suppliers of goods and services, may strengthen reformers’ hands. In addition, armed with research on the economic benefits of reform, a coalition of willing nations might be assembled to negotiate a plurilateral trade accord to reduce and eliminate particular types of ACMDs. To the extent they succeed, national and multilateral initiatives to curb ACMDs would broaden the reach of competition and trade laws, thereby shrinking the scale of ungoverned trade and competition law space in a welfare-enhancing manner.

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Additional Information

ISSN
1945-4724
Print ISSN
1945-4716
Pages
pp. 87-102
Launched on MUSE
2016-12-12
Open Access
No
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