The Unanticipated Consequences of Creating Independent Competition Agencies

Abstract

Abstract The tendency for governments to create independent competition agencies is analysed in the cases of Directorate General IV of the Commission, the German Cartel Office, the Office of Fair Trading, and the Competition Commission. Analysis of the historical process of agency design, and the re-definition of agency missions, indicates a progression from a symbolic and constitutional rationale to a more material impact on contemporary market economies. Drawing loosely on principal-agent theory, changing agency roles are ascribed partly to the activism of independent agents, partly to the changing priorities of majoritarian principals. The unanticipated consequences of delegation include an escape from business capture but a shift to legalism or economic purism. Keywords: competitionpolicyindependenceagencyregulationdelegation