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In 2002, IDRC began supporting research on competition policy in developing countries and feeding the findings into policy debates. The decision to enter this field was based on four factors that met all of IDRC’s normal criteria for research investment:

• There was a strong theoretical case for a competition regime to enable the market economy to meet development objectives.
• There was a need for more information about national competition policies and challenges to implementation.
• Knowledge of the international aspects of private restraints on markets in the context of globalization was lacking.
• Important international forums existed for discussion of these issues.

IDRC is a publicly funded Canadian institution governed by an international board. It was founded in 1970 to support research by developing-country researchers that would address development problems. The research covers a large number of areas, including environment and natural resource management, information and communication technology, innovation and science, and social and economic policies. All research supported by IDRC is applied rather than “blue sky” science. It is specifically related to developing countries and informed by the countries’ own development goals and objectives. In the area of competition policy, IDRC’s research support is directed at improving research-based evidence on a number of issues related to the design and implementation of policies to promote and protect competition in developing-country markets.

IDRC has supported research on competition through its international economic relations programs. From the beginning, special attention has been paid to cross-border competition problems with particular reference to exposure to anticompetitive practices from abroad that comes with the liberalization of trade and investment. But, to be properly balanced, research also addresses domestically generated anticompetitive practices unrelated to the pressures of globalization. Anecdotal evidence suggests that such practices are widespread and may cause serious damage to poor people and to small or new firms and businesses.

Studies have been supported in many sectors and on many themes, in large and small countries in all parts of the developing world. Some bias toward Latin America and Africa at the expense of Asia reflects the few attempts that have been made in the latter region to implement economy-wide competition regimes. Research has covered analysis of problems related to anticompetitive conduct at all levels: local, domestic, regional, and international. It has also examined experiences in policy implementation and drawn potential lessons in policy development relating to legal provisions and cooperative arrangements and ranging from local-level measures to national and regional structures and multilateral negotiations.

IDRC has supported many different types of institutions — universities, international organizations, and non-governmental action-research and advocacy organizations — to do the research. University studies tend to focus on testing hypotheses, determining causes and effects, and improving analytical techniques. International organizations have special skills in synthesizing and publicizing research findings for policy audiences. NGOs are given IDRC support to enable them to use more research-based evidence in their advocacy activities, pressing for social and economic justice and, ideally, encouraging policymakers to pay attention to new issues.

IDRC believes that providing support for combinations of topics and policy-research actors and ensuring that their findings are included in policy debates is a good way to bring relevant, empirically verified material to the attention of policymakers as they design and implement policies for development. Research results are not the only factor affecting policy decisions, but they are essential to good policy-making. Policies must be informed by rigorous, research-based evidence if they are to be well designed in terms of their objectives. Once new policies are introduced, research also needs to be done to monitor and evaluate particular policy instruments and enable them to be fine-tuned to increase their effectiveness. But research funding is a low priority in developing countries. Thus, external support from IDRC or other donors can be disproportionately valuable to good policy formulation.

All this is true of the policy process in general. However, research is doubly important in the competition policy field, because competition law enforcement is a research-based function. Investigation of specific firm behaviour is the bread and butter of competition law enforcement, but studies of the structure and dynamics of relevant markets are also needed. A sophisticated set of conceptual tools and analytical techniques has been developed for this purpose. Great skill is needed by practitioners to apply these tools and techniques and decide what action to take to remedy various situations. Yet, most authorities in developing countries are new and underfunded. They have little or no resources for research and weak research capacity. Therefore, IDRC has also supported research by competition authorities themselves, in collaboration with a local research institute, as necessary. Moreover, support is given to allow them to share their findings with other authorities and help improve international understanding and coordination.

The following sections report empirical findings of IDRC research projects on competition policy and draw lessons from them to inform efforts at implementation and policy development.

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