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

Abstract

ABSTRACT To what extent does the choice of competition law model correlate with economic inequality? While competition laws have been suggested as potentially contributing to current inequality trends in developed countries and as a viable instrument to address them, there is little empirical evidence on their distributional effects. This article helps fill this gap. It utilizes a comparative legal approach and a unique estimation framework based on the textual similarity to estimate the differences between the US and EU models and provides evidence that countries that adopt a US-style antitrust model are more likely to exhibit higher income inequality levels over time. While this link should not be interpreted causally, it suggests that potential institutional factors might affect the rise of inequality.