Capitalism, Democratic Capitalism, and the Pursuit of Antitrust Laws

A major global policy development in the last few decades has been the adoption of national antitrust laws by many developing and transition countries. A primarily American creation, antitrust laws have now spread to nearly all corners of the world. This study undertakes a political economy approach to understanding the global adoption of antitrust laws. We focus on the causal connection between a democratic form of capitalism and antitrust adoption. We argue that the interaction of democracy with a pure form of capitalism results in a political economy characterized as “democratic capitalism.” On the basis of this understanding, we then develop a theoretically grounded conceptual model and offer multiple testable propositions. Our findings show that democratic capitalism, and not capitalism in its pure form, was instrumental in countries adopting national antitrust laws. We attribute this finding to the greater “transactional congruity” that exists between democratic capitalism and antitrust laws. We conclude by discussing the implications of this finding for future antitrust adoption.