Trapping the tigers: Regulation of market entry and the rule of law in SE Asia

Does more market competition lead to higher income and utility in the long run?

“…According to Acemoglu (2008), it is ex ante unclear which political system in terms of economic development and efficiency is superior because too high tax rates and too high barriers to entry have a growth-retarding effect. Demsetz (1982) and Touchton (2013) argue that in the medium and long run only legally enforced barriers to entry (patents, taxi medallions, licenses, and the like) are meaningful. Zingales (2017) argues that firms with market power try to protect themselves against competitors by a mixture of innovation and lobbying.…”

Persistent Developmental Limits to Devising Policy Innovation for Innovation Policies in Emerging Economies

“…Malaysia and Indonesia have suffered from the lack of proper institutional arrangement to cope with the side effects of previous economic policies (Basri, 2013;Hill et al, 2012). In addition, an impediment to the growth of innovation and entrepreneurship comes from the state regulations that create a high barrier to market entry (Touchton, 2015), while any significant efforts to ensure the regulations are effectively enforced are missing.…”

“…Against considerable economic growth of Southeast Asian middle-income economies, policymakers have seemed to attempt to make credible commitments with firms and investors that compensate adequate political institutions in enforcing the rule of law (Touchton, 2015). However, problems in applying the national innovation systems in the two countries persist, for they are reinforced by the prolonged Malaysian political transition (Ufen, 2013) and the entrenched political stagnancy in the Indonesian state institutions (Mietzner, 2015).…”

Campaigning for Capital: Fair Elections and Foreign Investment in Comparative Perspective

“…Unfair elections may signal political instability, but also certain characteristics of a country's government that might render foreign firms' property rights more secure, rather than less. First, regimes that routinely hold fraudulent elections might also be free to act without public oversight and make deals with foreign firms that secure their property rights over the objections of the citizenry or in ways that prevent competition (Touchton 2015). For example, an illiberal democratic government could offer a foreign energy firm a concession to extract oil and prevent public calls to nationalize such a firm from becoming reality by electing candidates that supported such a policy.…”