Nova workboard

a blog from young economists at Nova SBE

Competition Policy

In the majority of emerging economies, there are a few players that dominate the domestic markets, making difficult and expensive to entry. The regulation and laws might possible distort competition in the market, encouraging the existence of cartels and monopolies, in some cases. Indeed, sector-specific restrictions created by government policies can limit entry or affect the ability of companies to compete in these key markets. In this sense, the ineffective enforcement of the competition rules allows anti-competitive business practices. Consequently, local markets are not able to fully develop; the organizations are less competitive than their foreign rivals are, and less likely to compete globally.

Given this, the objective of the competition policy is to foster economic welfare through the application of a set of market rules to ensure a level playing field for all companies. When implemented, its success allows in the elimination of anticompetitive regulation and barriers that are not necessary to competition imposed by policies of the government. Furthermore, anticompetitive business practices are also deterred by effective implementation of competition rules.

 

Mafalda Gomes

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Author: studentnovasbe

Master student in Nova Sbe

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