Economic Inequality and Competition Law: A Comparative Analysis of the USA Antitrust Model

By Amit Zac (University of Oxford)

To what extent does the choice of competition law model a relevant factor affecting ‎economic inequality? While competition laws have been suggested as a possible ‎factor contributing to current inequality trends in developed countries, and as a viable ‎instrument to address them, little empirical evidence exists on their distributional ‎effects. The article utilizes a unique estimation strategy based on the textual similarity ‎between competition laws, and the General Synthetic Control method to study the ‎relationship between competition laws and economic inequality. By creating a ‎synthetic counterfactual unit from an OECD donor base of actual observations, we ‎test the link between the USA ‘model of law’ and income inequality across developed ‎countries. We show evidence that the USA model is linked to higher levels of income ‎inequality, compared to the EU competition law model.‎

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