Institutional Coherence and Effectiveness of a Regional Competition Policy: The Case of the West African Economic and Monetary Union (WAEMU)

Abstract

In line with the ever increasing development of regional competition policies in developing countries, the West African Economic and Monetary Union (WAEMU) has crafted a regional competition law that entered into force in 2003. The design of the regional enforcement institutions set forth by the regional law is characterized by a centralized approach in two respects. With regard to the substantive law, the Union has the exclusive competence to regulate anticompetitive practices (agreements and abuse of dominant position). As regards enforcement, the regional competition office is vested with exclusive decision making power. National competition authorities are only associated with the decision-making process. At the outset, this centralized institutional framework was criticized by member states as not being efficient enough to deal with purely national anticompetitive practices. Deprived of the decision-making power they used to enjoy before the entry into force of the regional law, member states have opposed the centralized approach. They have not undertaken the reforms of their national laws in order to make them conform to EU law. In addition, the national competition authorities do not support the Commission as they are required by the regional law when it conducts searches or inquiries at the national level. At the regional level, some flaws have also been identified in the operations of the regional office, which faces administrative burdens that undermine the effectiveness of its interventions in the market. The regional office is understaffed, which makes these interventions ineffective. The combined resistance of the national competition authorities to the centralized approach and the challenges the regional office faces have resulted in the limited effectiveness of the regional law, as evidenced by regional case law. This paper builds on WAEMU's eight years’ experience of enforcement as well as on other experiences of regional integration, and identifies a number of criteria it terms “competition constraints,” which should be taken into account when designing a regional institutional framework. Those competition constraints include the size of the regional integration group, the degree of fluidity in trade between member states, the respective institutional capacities at the regional and national level, and the availability of a competition culture in the member states. Applying those criteria to the case of WAEMU, we contend that the regional institutional framework should be redesigned so that national competition authorities are more involved in the decision-making process. It is also crucial to set up a collaboration framework between the regional office and the national competition authorities.