A Decade of Competition Policy in Arab Countries: A De jure and De facto Assessment

Despite its several benefits, competition policy seems to lack the attention it deserves in terms of public interest and in terms of research in Arab countries. In the 1990s, many of them started to adopt economic reform programs that were broadly market packages aiming at reducing the role of the state, whereas competition laws mostly appeared in the following wave of reforms in the 2000s. However, the adoption of law does not seem to be sufficient in its own and what really matters is its implementation and enforcement. To date, many Arab countries have at least ten years of experience in competition policy, which we believe is a sufficient and suitable experience for assessment. However, to our knowledge, there are no cross countries studies assessing the market outcomes of competition policy in this group of countries. Against this backdrop, the objective of this paper is twofold. First, the paper aims at assessing competition policy in Arab countries in terms of rules (de jure) and implementation (de facto). For both the rules and implementation, we construct indices assessing three categories: enforcement, advocacy and institutional effectiveness. Second, the paper analyses the association between competition policy rules (de jure) and implementation (de facto) and competition outcomes (factual-based and perception-based). This correlation exercise uses our own created indices and the World Bank Enterprise Surveys data (WBES). Our main findings show that, in general, the overall assessment of our group of Arab countries competition legislations seems to be broadly average. In particular, Egypt and Tunisia had better scores in their implementation index for 2012 compared to their corresponding rules index, while it is the inverse in the Jordanian and Moroccan cases. Moreover, the Djiboutian and the Yemeni legislations are the weakest among the group. As per factual based competition outcomes, our competition indices are in general negatively correlated with market power, pointing out the importance of the deterrence effect that competition policy can play in limiting market power. In addition, on the perception-based outcomes front, our indices are mostly positively associated with perceiving more competition.