Export Cartels: Is there a need for Global Rules?
One of the reasons sometimes given in support of international competition rules is the need to curb export cartels. Export cartels, however, are not necessarily competition or welfare reducing. They are just as likely to enhance competition and welfare. The evidence reveals that opinions are quite divided. However, there is one constant: no country has a strong incentive to ban export cartels unilaterally. The reason for this is that most of the adverse effects generated by the cartel are experienced abroad, not locally. Therefore, if there is a case for curbing export cartels, the alignment of incentives means that an international agreement is probably necessary. This article suggests one possible arrangement.