Competition Policy, Industrial Policy and National Champions

A wide variety of different instruments may be used for the purpose of implementing industrial policy, including government procurements, exemptions from antitrust laws, regulatory barriers to competition, access to credit, arranged mergers and acquisitions, control of acquisitions of national companies by foreign investors, easy access to commodity resources and the products of monopolist companies. National champions may be created or protected in a number of ways, such as by the granting of state aid, the encouragement of domestic mergers, or the opposition to a takeover of a domestic company by a foreign company. For a number of jurisdictions, industrial policy is motivated by a desire to correct market failures. In such a case, one acknowledges that profitable private production may not be achievable and that government intervention can address this problem in a manner that is welfare maximising. Such a policy does not allow for the granting of funds if such funds could be achieved from the free market. Some jurisdictions, however, accept a wider function for industrial policy. An important feature of industrial policy in Uzbekistan, for example, is to foster exports, decrease the dependence of imports, and create employment. Other jurisdictions do not have an industrial policy as such and articulate one of free competition and vigorous antitrust enforcement