Note:  Director of Economic Research, Antitrust Division, US Department of Justice, and Visiting Professor, New Economic School, Moscow. The author is grateful for helpful comments from participants at the conference on ‘The State of Competition in the Indian Economy' (Competition Commission of India, New Delhi, June 2009) and from Tracy Fisher, Chris Nash, Nick Wills-Johnson, and Xiaolan Zhou. The Antitrust Division encourages independent research by its economists. The views expressed are those of the author and are not purported to reflect the views of the US Department of Justice.
Abstract: One important issue facing reformers, considering the restructuring of the seaports and freight railways sectors of a developing country is the creation of competition or, alternatively, avoiding the creation or preservation of monopoly power. In seaports a crucial distinction is often that between intra-port and inter-port competition; in freight railways, between competition among train operating companies over a monopoly track and competition among vertically integrated railways. In both cases it is useful to frame the issue as one of competition at the component level within an open system versus competition between closed systems. In both cases, as well, the market definition paradigm suggested by the Horizontal Merger Guidelines of the US competition agencies provides a useful framework for analysis.