Transplants in Latin America: (so far) a successful story

17.04.2024

CeCo Chile

Felipe Irarrázabal Ph. Director CeCo UAI.

*This column reflects Felipe Irarrázabal’s speech at the event “Competition in Developing Countries – Latin America” (April 12), organized by George Washington University Competition Law Center and CeCo (in Washington).

In Latin America, we did not invent the market economy. We have been implementing it in most of our countries, with difficulty and recently. In Latin America, we didn’t invent the institutional framework of free competition either. We’ve done transplants, taking aspects from the United States and Europe. Studying the English, German, and Spanish cases. Adopting the theories of damages that are born in the countries of the north of the world.

Because of those transplants, sometimes we don’t know where we are. We borrow ideas from here and there and mix them. The results, sometimes, are harmonious and work. Other times, we make mistakes and invent a Frankenstein, with the head of the United States, the arms of Europe, and the feet of England and Germany.

«CeCo is a public space, open to the entire community of authorities, practitioners, and economists, which allows the evaluation of transplant experiences that occur in the region, based on objective evidence.»

From looking so far north, we haven’t taken the time to study ourselves. To look at ourselves. There are obvious connecting factors in Latin America. The economies of each of our countries are, in general, concentrated and heavily influenced by economic groups. Our governments tend to be short-sighted and, now and then, irresponsible. Our legal systems are continental, with philosophical differences from common law. Our love of theory can lead us to lose the grounding wire of common sense.

Perhaps more importantly: we are united by the Spanish language, by similar histories, full of leaps into the void, and by a similar idiosyncrasy. A Chilean can easily get along with a Mexican, just as an Argentinian can easily get along with a Peruvian, Colombian, or Ecuadorian. With Brazil, on the other hand, extra effort is required because of the language barrier, which is overcome with the English language.

The institutions of competition in each of the Latin American countries are different. From afar, they may look similar. Up close, you can see differences. The same thing happens with specific cases, whether of cartels, abuses, or mergers. From afar, they are children of the same parents. Up close, the siblings are different.

There is one phenomenon, however, that is the same. The institutions and the cases that process those institutions are the result of transplants. Transplants are not a mere copy-paste operation. They require accommodations. Those accommodations require creativity and energy to be successful. There are successful transplants, neutral transplants, and failed transplants.

But the devil is in the details. The design of the authority, the personalities of the people who hold public office, the particularities of each market, and the procedural aspects of how infringement cases are handled, make a difference and are different from country to country.

The diversity that exists among the different countries of the region is valuable. They are experiments, the evaluation of which requires time to pass. The problem is that there is a lack of resources and every decision, whether based on the design of an institution or the theory of harm in a particular case, carries with it an alternative cost.

CeCo is a competition center created in 2019 for research and dissemination of competition law and economics. CeCo was born with a Latin American vision. Currently, CeCo is made up of seven universities: Adolfo Ibañez from Chile, George Washington from the United States, Javeriana from Colombia, Pacífico from Peru, Privada Boliviana from Bolivia, San Francisco de Quito from Ecuador, and recently Colmex from Mexico. We are about to join a prestigious Brazilian university.

CeCo is a public space, open to the entire community of authorities, practitioners, and economists, which allows the evaluation of transplant experiences that occur in the region, based on objective evidence. This evaluation helps to ensure that the new decisions that each country adopts, whether in the structure of the institutional framework or the investigation of a specific case, consider the success or failure of a transplant that was previously performed in one of the countries of the region. In this way, you can replicate successful changes and avoid stumbling over the same stone that some countries suffered.

Today we are going to present three CeCo investigations. First, the perception survey led by George Washington of practitioners from the main countries of the region and their respective authorities. Second, Michael Jacobs’ investigation into compensation for damages in Chile, Colombia, Ecuador, and Peru. Third, the central points of competition law in the same countries, according to Garrigues’ research.

All three of these efforts seek the same thing. Know ourselves. To analyze, with objectivity and high vision, the different transplant experiences in the region. To help each country’s competition community, authorities, and practitioners, to make the best decisions about standards and cases, based on evidence of similar situations that have occurred in another country in the region.

Competition law and economics require humility. To understand that we didn’t invent the wheel. To know that their enforcement and advocacy is delicate and complex. To know that our technical language is little understood by most citizens. But it also requires ambition. To carry out innovative transplants that incorporate the reality of each country. To evaluate our experiments scientifically and objectively and to transmit to the rest of the countries, both the successes and the failures.

Thanks.