Review of Industrial Organization 21: 107–112, 2002.
Editorial Introduction: Market Power in East Asian
Its Origins, Effects, and Treatments
DAVID K. ROUND
Centre for Applied Economics, School of International Business, University of South Australia,
Adelaide SA 5001, Australia
Key words: Competition policy, co-operation, culture, politics, regulation, trade.
JEL Classiﬁcations: K21, L4, L5.
I. A Culture for Competition
In most western economies it has been recognized for many decades that markets
generally work best when operating under competitive conditions arising from both
domestic and international sources, but that left to their own devices, some markets
will fail due to the inherent rent-seeking behavior of entrepreneurs, as well as to
basic underlying market conditions and to the quirks of legislators. Hence dozens
of countries have developed antitrust or competition laws since the United States
passed the Sherman Act in 1890. Considerable jurisprudence has been established,
much of it consistent in ideology, if not in measurement and enforcement, where
various countries have chosen to see the law as pursuing different end results.
Attitudes differ, however, in East Asia. In its issue of 20 January 2001, The Eco-
nomist noted (p. 65) “ ...thatAsia’s consumers suffer from producers who abuse
their market power has long been known”. The Economist, never shy of promoting
the ideal of free markets, lamented the historical lack of interest throughout the
I am grateful to all the authors and organizations who participated in this project, which in-
volved attendances at workshops in Jakarta (sponsored by the Centre for Strategic and International
Studies) and Taipei (sponsored by the Taiwan Institute of Economic Research) and numerous e-mail
communications. The project was sponsored by the Paciﬁc Economic Cooperation Council’s Trade
Policy Forum, and I am most grateful to Christopher Findlay, Kerrin Vautier and Edward Chen for
their support and help in the planning stages. Susanna Suen provided most invaluable administrative
support in organizing the workshops and keeping communications ﬂowing between the contributors.
Finally, I must thank the previous General Editor (and now Consulting Editor) of the Review, Geoff
Shepherd, for his invitation to edit this special issue, and for his constant support and encouragement
during its lengthy planning and gestation period; and also John Kwoka for his continuing support for