This project is funded by a Research Project Grant from the Leverhulme Trust for two years from February 2020
What are the effects of competition laws on the distribution of wealth? Could competition law provide a viable and effective instrument to address inequality? These questions are at the heart of a research project conducted in Oxford with the financial support of the Leverhulme Trust.
The study, launched in February 2020, looks at the relationship between competition policy and wealth distribution. The project’s overarching aim is to develop a better, and empirically grounded, understanding of the ways in which competition law legislation, and its enforcement, could materially affect the distribution of wealth and economic inequality. It aims to provide clarity as to the role competition policy could play alongside other policies in addressing social inequality.
Using empirical methods and applying them to rich data sets, the study aims to shed light on the link between competition policy and wealth distribution. The study will include cross-country analysis on a panel data of competition laws and economic factors, as well as a time-series study looking at key jurisdictions, including the United States and the European Union.
Research papers published by the group include:
Journal of Antitrust Enforcement, jnac011, https://doi.org/10.1093/jaenfo/jnac011
2. Competition Policy and the Decline of the Labour Share (April 2021)
3. Competition law and Income Inequality: A Panel Data Econometric Approach (September 2020)
Journal of Competition Law & Economics, nhac006, https://doi.org/10.1093/joclec/nhac006
1. Competition Law and Economic Inequality (Amsterdam, 20.05.21)
Presentation by Chris Decker, at the Amsterdam conference 'Should Wealth and Income Inequality Be a Competition Law Concern?' 20 May 2021\n
2. Competition Policy and the Decline of the Labour Share (Amsterdam, 21.05.21)
Presentation by Carola Casti, at the Amsterdam conference 'Should Wealth and Income Inequality Be a Competition Law Concern?' 21 May 2021\n
The Oxford group will be supported by an international steering committee which includes:
- Professor Andy Eggers (Oxford)
- Professor Amelia Fletcher OBE (UEA and Competition and Markets Authority)
- Professor Bill Kovacic (Kings College, GWU and Competition and Markets Authority)
- Ms. Teresa Moreira (UNCTAD)
- Ms. Ania Thiemann (OECD)
- Professor Tomasso Valletti (Imperial College, formerly DG Competition)
More details about the study
Economic inequality is on the rise in most developed countries, and commentators and researchers often point to the usual suspects: globalization, technological advances and regressive taxation. Some have, however, suggested that competition laws form part of the story of inequality. More specifically, that the lack of effective competition law enforcement may provide an explanation to negative wealth distribution trends.
Until now the debate has mostly been limited to abstract legal and policy arguments. Furthermore, it has been anchored in mainstream economics and based on limited empirical evidence which explores the actual effects competition policy may have on economic inequality.
This research project seeks to address this gap by utilizing empirical methods to shed light on the link between competition policy and wealth distribution. Its results can help us shape more nuanced competition policies and provide a better understanding of their economic and societal impact on different members of a society.
The study will use two key methods of estimation:
The first is a cross-country analysis on a panel data of competition laws and economic factors. This provides a macro view of trends in competition policy and wealth distribution in different countries over the time. It will be used to identify the effects of competition laws scope on economic inequality under a ‘wide brush’ – trying to cluster some observations from this large panel data. This type of analysis, unavoidably, ignores some of the key differences suggested by our hypothesis and potential alternative factors related to economic inequality trends. For this reason, it will be complemented with a micro case-study approach.
The second method involves specific time-series study looking at key jurisdictions, including the United States and certain Member States of the European Union. This methodology explores the effects of competition dynamics, proxied by levels of mark-ups, to inequality indicators, for a more robust result of causality.
Outputs and workshops
This ambitious study seeks to bridge disciplinary divisions, by deepening our knowledge on the effects of competition law on market dynamics, and enriching current debates about ‘fairness’ under competition law.
As the study progresses, the research group will publish empirical and policy papers, exploring the link between competition policy and economic inequality.
Workshops on the topic will be hosted by the University of Oxford Centre for Competition Law and Policy.
Enquiries and comments
The results of the study should be of interest to a wide, interdisciplinary and global audience and have the potential to affect policy debate in years to come. With this in mind, we welcome and encourage comments and suggestions from interested parties and researchers.