The Effects of Competition Policy on Development – Cross-Country Evidence Using Four New Indicators

Over the last two decades, many developing countries have introduced competition policies. This paper introduces four new indicators on various aspects of competition laws and competition agencies to make competition policies comparable. These indicators are used to estimate the effects of competition policies and all four contribute at least marginally to explaining differences in total factor productivity. This is also true if developing countries are analysed separately. In addition to the direct effects of competition policy on total factor productivity, an indirect effect is identified: countries scoring high with regard to competition policy suffer less from corruption.