Markets Need Not Be Perfect

Download or read book Markets Need Not Be Perfect written by Dina I. Waked and published by . This book was released on 2017 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: This article explores alternatives to the proscribed ideal of perfect competition and allocative efficiency that are more suitable to countries in the Global South. Seeking perfect competition in order to realize allocative efficiency is not only an unsuitable guide for competition enforcement in countries in the Global South, but it also leads to an undesirable competition policy. An alternative competition policy seeking dynamic efficiency, innovation and growth is proposed to replace the static ideal of allocative efficiency. Under this proposed alternative the ideal market structure, necessary to realize these goals, is no longer confined to perfect competition, but is one that strikes a balance between competition and concentration. Under this alternative, the concentrated enterprises are considered beneficial for society as they can innovate, spend on R&D, and in the long run can reduce their cost functions to allow for even lower prices than those prevailing in perfectly competitive markets. This proposal relies on a redistributive mechanism that is integral to the pursuit and realization of this alternative policy and market structure. With redistribution pursed within the implementation of this alternative, the background rules of competition law are thereby changed. Support for this proposed alternative, where competition policy and market structure analysis deviate from the dominant discourse, is drawn from historical evidence, empirical studies and progressive economic thought.