ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Competition Policy: India and the WTO

The Competition Bill which is before parliament has assumed an international dimension as well as a new sense of urgency in view of the decisions at the WTO Ministerial Conference at Doha. An examination of the Bill and the working of India's competition policy in relation to international practice and the likely direction of eventual WTO negotiations after 2003.

Predation, Protection and the 'Public Interest'

A comprehensive examination of predatory pricing in the Indian context is urgently required. The opening up of the economy provides greater scope for foreign firms to engage in aggressive price competition and for Indian firms to utilise laws against predatory pricing. The terms of such a confrontation will be set by a new competition policy which is now on the anvil. This article examines the law and economics of predatory pricing, especially in cases involving imports, and tries to draw lessons from theory and experience for the proposed new competition policy.

Brave New World of Global Commerce

Brave New World of Global Commerce Aditya Bhattacharjea Developing Countries and the Multilateral Trading System: From the GATT to the Uruguay Round and the Future by T N Srinivasan; Oxford University Press, Delhi, 1998; pp 140, Rs 395.

Analysing Indian Export Performance

India's Exports: An Analytical Study by Sugata Marjit and Ajitava Raychaudhuri; Oxford University Press, New Meeting the Challenges of the European Union; Prospects of Indian Exports by Atul Sarma, Gerrit Faber and Pradeep Kumar Mehta; Sage Publications, New Delhi, 1997; pp 346, Rs 425.

Investment, Exports and Growth-A Sceptical Note

Investment, Exports and Growth A Sceptical Note Aditya Bhattacharjea IN a recent paper in this journal, Athukorala (1996) has eriti ciscd the earlier contribution of Patnaik and Chandrasekhar (1996, hereafter PC). PC had contested the view that growth in developing countries can be explained by the "efficiency of resource use", by showing that the growth rates of GDP as well as exports could be substantially explained by theinvestment/GDPratioalone in cross-country regressions. Athukorala argued that such single-variable regressions were inadequate to establish the superiority of the 'investment' view over the 'resource allocation' view. He proceeded to show that even in the original PC data set, both the investment ratio and the growth rate of exports were significant in explaining growth, althoughfhecoefficient on the former was much less than that estimated by PC. Also, he showed that export growth in turn could be explained by the investment ratio and a dummy variable which distinguished between inward and outward-oriented countries thereby relating growth more directly to the policy regime. While there is merit in Athukorala's methodological criticism (and also that of Dubey 1996, with which I am not concerned), my purpose in this note is to show that his analysis is Hawed, and that in fact his own results as well as several other empirical studies show the explanatory rote of capital accumulation in growth to be more secure than that of trade-related variables.

Economic Reforms and the External Sector

Economic Reforms and the External Sector Aditya Bhattacharjea THE government's Economic Survey 1995-96 has been seen in many quarters as an attempt to put I he best possible gloss on its economic record, with an eye to the elections. Instead of focusing on the year under review, the Survey takes the longer view, looking back over the entire period of economic reforms since 1991. The chapter on the external sector is no exception. It claims that the last five years have been marked by "a noticeable structural change towards a more stable and sustainable balance of payments", whose "strength and resilience" is attributed to "robust export growth". The country's external indebtedness has declined; the volatility of the exchange rate in the latter hall of the year is downplayed, and is said to have resulted in a desirable depreciation of the rupee.

Protection and Exports

Protection and Exports Aditya Bhattacharjea IN demonstrating that under certain circumstances tariffs protection can in fact promote exports by the protected industry, Marjit and Sarkar (1995; hereafter MS) have unwittingly rediscovered a result published by Bhagwati (1988) in a little-known paper. In Section I of this brief note, after restating their result. I summarise some of the important qualifications to this argument that Bhagwati pointed out, and add some caveats of my own. In Section II, I examine their parallc vestigation of the export- promoting effect of a quota, and point out that they have overlooked some crucial implications of their own analysis.

In Praise of Reform

In Praise of Reform Aditya Bhattacharjea India in Transition: Freeing the Economy by Jagdish Bhagwali; Clarendon Press, DELIVERING these Radhakrishnan lectures at Oxford in June 1992, Jagdish Bhagwati had reason to feel satisfied, even triumphant. After more than a quarter century of urging market-friendly economic reforms on his country's pertinacious policy-makers, he was no longer (as he put it) "kicking yet again against a stone wall". Instead, he was singing the praises of the Rao government's 'reform by storm'. Crediting finance minister Manmohan Singh with taking India on her 'tryst with destiny' Bhagwati declared ''we are finally in the spring of hope".

Strategic Trade Policy and Developing Countries

New theories of 'strategic' trade policy developed during the 1980s challenged economists belief in the optimality of free trade. However, influential critics soon dismissed the relevance of the new theories to practical policy, especially in developing countries. This paper argues that imports of developing countries are frequently supplied under conditions of imperfect competition, and that consequently the environment for strategic import policy exists. This is first illustrated by indirect empirical evidence, and then with reference to historical and institutional features of developing countries' import trade, reinterpreted in the light of modern theories of industrial organisation.

Payments Adjustment in Theory and Practice

and Practice Aditya Bhattacharjea The Balance of Payments: New Perspectives on Open-Economy Macroeconomics by Mark P Taylor; Edward Elgar Publishing, Aldershot, IWp; pp xiy + 210, price not stated.

Tariffs and Foreign Prices

Tariffs and Foreign Prices THE empirical finding reported by Nambiar and Mehta (1987, hereafter NM), of an inverse relationship between Indian tariff rates and unit values charged by foreign suppliers has generated an interesting debate in these columns. Our purpose in this note is to take issue with the way in which the theoretical and policy aspects of this question have been handled by various contributors, its statistical basis (acknowledged as not entirely satisfactory by NM themselves) having been trenchantly criticised by Singh (1987).

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