Development Implications of Restrictive Business Practices

Abstract

One convenient way of dealing with the study of restrictive business practices and development is to consider the world economy in a two-sectoral sense. Assume, for instance, that there is a restrictive business practices intensive sector that is broadly called developing countries. The reasons why this can be called a restrictive business practices intensive sector have already been discussed—namely, the nature of the markets in which transnational corporations are found, the reliance of developing countries on such corporations for trade and production, and the absence of adequate controls for dealing with such practices. Developed countries, however, usually have controls for regulating restrictive business practices. Therefore, in all probability the developing-countries sector is likely to have a higher incidence of such practices than is the developed-countries sector. We are in no position to establish the precise extent of this. Developed countries cannot be regarded as a nonrestrictive business practices sector, however. The reason for this is that although such practices are controlled, they are not completely eliminated.