Adetoro, David Oluwadare
Competition policy and resource utilization:
challenging implications for economic development in Nigeria.
PhD thesis, University of Glasgow.
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The starting point for this thesis is the established position that in free economies, by protecting the operation of demand and supply, competition law and policy (i) maximizes consumer welfare and consumer satisfaction, better than by (a) government controls and regulation or (b) unregulated competition, and (ii) contributes to economic growth and development. Competition is assumed to apply as a necessity, equally to developed as well as developing economies, with Nigeria taken as a proxy for resource-dependent developing economies. The contents of the thesis are underpinned by the question: what is the extent to which competition law and policy could be employed to promote the efficient allocation of resources in resource-dependent developing economies? The submitted views are partly based on an analysis of the objectives of competition law and policy, for determining whether resource-dependent countries have peculiar problems, and if the answer is in the affirmative, whether the general standards in competition policy are sufficient to address them. This analytic approach is the same as the one underlying the draft Federal Competition Bill (FCB) in Nigeria, as an example of an appropriate competition instrument in a resource-dependent country.
The thesis examines some of the standards in the United States of America (USA) and European Union (EU) competition policies, such as those concerning agreements, abuse of dominant position and mergers, to determine whether the same rules could apply in all economic regimes, and which competition model could be best adopted by resource-dependent developing countries, with Nigeria as an example. Competition standards and both primary and secondary competition problems that could distort the process of competition, as well as constraints which may emerge in the competition process in developing countries are explored. Some of these, as problems, include the issue of ‘resource curse’, rent seeking, corruption, abusive business practices and a few others. Their examination is in the thesis aligned with the scrutiny of the characteristics of developing countries in contrast to developed countries; again, the economic circumstances of Nigeria, as a proxy for resource-dependent developing countries, are considered for determining whether competition law and policy could be used as a tool for addressing competition problems that may exist in resource-dependent developing countries.
The conclusions of the thesis underline the types of economic problems for which competition law and policy, with the economic development of resource-dependent developing countries in mind, could be used to address, especially restrictive trade practices, abuse of dominant position and mergers that could substantially lessen competition. Furthermore, the (even if limited) role of regulation is argued, that is, in the face of any expected limitations of competition in certain sectors of an economy undergoing liberalization in the wake of current international merger waves. Not least the importance of establishing a competition agency to administer and enforce it is underlined, that is, independently from the influence of the government.
It is argued that for the draft FCB in Nigeria to become an appropriate competition instrument, the power and mandate of the Federal Competition Commission must be reviewed, with sufficient powers for the task, also for promoting the wide objectives anchored in the draft Bill. It is also pointed out that competition cannot on its own directly resolve, in Nigeria, the peculiar socio-economic problems such as rent seeking and corruption, but it is argued that with an active engagement of competition advocacy, along with the adequate implementation of competition law and policy, the problems could be greatly reduced. The thesis highlights, among other recommendations, the need for further research on competition problems relating to resource-dependent countries.
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