The Politics of U.S. Antitrust Regulation

The purpose of antitrust regulation is to promote and maintain fair competition in the U.S. economy. Yet economists and political scientists have long been unable to identify economic determinants of antitrust activity. Recent studies have turned toward bureaucratic theory for explaining antitrust enforcement. However, we argue that both economic and bureaucratic theories of antitrust regulation fail because they ignore the overarching institutional framework within which regulation occurs. We use the theory of overhead democracy to formulate a political explanation for antitrust regulation. Drawing upon data for the Antitrust Division's resources and enforcement activity from 1970 to 1989, we show that Antitrust Division behavior is strongly affected by the major U.S. political actors, including the president, Congress, and courts. We conclude by discussing the normative implications of political, rather than market-based, antitrust regulation.