Antitrust in China: The Problem of Incentive Compatibility

This paper reviews China's recent efforts to enact a competitionpolicy (antitrust) law. We focus on three issues: (1) What isthe substance of the proposed law, and how does it differ fromexisting antitrust law in other countries, (2) How will thelaw be implemented or enforced, and how will those who mustimplement this law interpret their mandate, and (3) What willbe the likely effects of this law given China's unique historyand cultural heritage. We emphasize China's economic, legaland regulatory contexts in which an antitrust law may be enforced.Our central focus is the problem of establishing a substantiveand procedural legal framework that is incentive-compatiblewith economic efficiency and growth. The draft law could beimproved, both to increase its clarity and to make its enforcementmore consistent with the goal of achieving improvements in economicefficiency. Nevertheless, there is much merit in the draft,especially its strong focus on reducing anticompetitive practicesof state-owned enterprises (SOEs) and other government bodies.However, our major difficulty with the new law is that, in theabsence of a tradition of reliance on the rule of law, Chineseand foreign enterprises will find it very difficult to relyon the antitrust statute or the actions of the courts in Chinaas a basis for predicting the antitrust liability that mightresult from various business practices. Therefore, the principalvector by which antitrust law (or indeed any law) affects economicbehavior is absent from the Chinese scene. Unless the bureaucracythat enforces the new antitrust law actively pursues a policyof consistent enforcement based on written guidelines, staredecisis, or other sources of predictability, the substance ofthe statute itself will have little significance. That outcomewould represent a significant loss for the economic welfareof the Chinese people.     

DOES ECONOMICS PROVIDE A RELIABLE GUIDE TO REGULATING COMMODITY BUNDLING BY FIRMS? A SURVEY OF THE ECONOMIC LITERATURE

This article surveys the voluminous economic literature on commoditybundling. While bundling has been widely studied, the vast majorityof the literature has focused on theoretical treatments of bundlingthat demonstrate a wide range of reasons why firms might engagein bundling. These papers generally contain restrictive assumptions,including assumptions regarding the existence of monopoly insome markets, and the nature of rivalry in others. The modelscontained in these papers also generally suppress the more obviousand ubiquitous reasons firms may use bundling. Moreover, thesemodels have not been subject to robustness checks, nor havetheir assumptions been tested empirically. This review of theeconomic literature generally confirms the US Solicitor General'sview in 3M v. LePage's regarding the underdeveloped state ofthe economics literature and its position that the US SupremeCourt should defer promulgation of antitrust standards for bundling.While the literature has demonstrated the possibility that bundlingcan generate anticompetitive harm, it does not provide a reliableway to gauge whether the potential for harm would outweigh anydemonstrable benefits from the practice. As a result, the widespreadapplication of the antitrust laws to bundling by firms can generatesignificant error costs by erroneously condemning or deterringefficient business practices. In the future, economists shouldseek to expand their understanding of both the anticompetitiveand procompetitive reasons firms engage in bundling. This willentail studying the reasons why bundling is adopted by firmswithout market power, relaxing the assumption of monopoly intheoretical models, and generating testable hypotheses and thedata to test them.     

Significance of functional and nutritive pulmonary circulation for vital reactions in the form of embolisms

The functional and nutritive circulation in the lungs is connected by anastomoses between the pulmonary and bronchial arteries. The anastomoses have the structure of blocked arteries from which arteriovenous anastomoses proceed to the peribronchial plexus. The pulmonary artery is provided with a flow impulse by the anastomoses, and oxygen-containing blood is admixed with the venous blood, thus forming an "aortalization" in the lungs. By diverting the bloodstream, venous blood can reach the bronchial artery. The peculiarities of the lung circulation are important for vital reactions in the form of macro- and microembolisms. Macroembolisms prove the functionality of the system if branches of the pulmonary artery are closed before the arteries are blocked. A hemorrhagic infarction either arises or does not arise, and the hemorrhagic infarction cannot exceed a certain limit. A microembolism is over and above the anastomoses. If the microembolism is greater, pressure in the arteria pulmonaris can cause blood from the pulmonary artery to overflow into the bronchial artery. Because arteriovenous anastomoses arise from the blocked arteries, microemboli can now reach the systemic circulation. Thus, the system described can explain the passage of microemboli into the systemic circulation, avoiding the capillaries of the lungs; on the other hand, larger microembolisms can prove the functionality of the system.     

Facing the powers that be

Lobbyists, entrenched forces in congress and self-interested friends will try to stymie Clinton's efforts. A look at four key arenas of combat.     

Historical geography of the population of Michoacan. Eighteenth century

The author incorporates geographic variables into this study of population dynamics in Michoacan, Mexico, during the eighteenth century.     

Reviews

R. W. Davies, ed., From Tsarism to the New Economic Policy. Continuity and Change in the Economy of the USSR. London and Basingstoke: Macmillan, 1990, xx + 417 pp., £45.00.

Alastair McAuley, ed., Soviet Federalism, Nationalism and Economic Decentralisation. Leicester and London: Leicester University Press, 1991, ix + 214pp., £38.00.

Loren Graham, ed., Science and the Soviet Social Order. Cambridge, MA and London: Harvard University Press, 1990, ix + 443 pp., £27.95.

Ronald I. McKinnon, The Order of Economic Liberalization: Financial Control in the Transition to a Market Economy. Baltimore, MD, and London: The Johns Hopkins University Press, 1991. xii + 200 pp., £20.00. $32.00.

Mary McAuley, Bread and Justice: State and Society in Petrograd 1917–1922. Oxford: Oxford University Press, 1991, xviii + 461 pp., £45.00.

David Armstrong & Erik Goldstein, eds, The End of the Cold War. London: Frank Cass & Co Ltd, 1990. 216pp., £19.50.

Paul B. Stephan III & Boris M. Klimenko, eds, International Law and International Security: Military and Political Dimensions. A US‐Soviet Dialogue. Armonk, NY, and London: M. E. Sharpe, Inc., 1991, xxii + 362 pp., $90.00.

Richard F. Staar, Foreign Policies of the Soviet Union. Stanford, CA: Hoover Institution Press, 1991, xl + 352 pp., £14.95 p/b.

Robert O. Freedman, Moscow and the Middle East: Soviet Policy Since the Invasion of Afghanistan. Cambridge: Cambridge University Press, 1991, xi + 426 pp., £35.00 h/b, £14.95 p/b.

Galia Golan, Soviet Policies in The Middle East: From World War II to Gorbachev. Cambridge: Cambridge University Press, 1990, ix + 319 pp., £27.50 h/b, £10.95 p/b.

Brian McNair, Glasnost, Perestroika and the Soviet Media. London and New York: Routledge, 1991, x + 231 pp., £35.00.

Shams Ud Din, ed, Perestroika and the Nationality Question in the USSR. New Delhi: Vikas, 1991, xv + 145 pp., £15.95.

Ronald J. Hill & Jan Zielonka, eds, Restructuring Eastern Europe: Towards a New European Order. Aldershot: Edward Elgar, 1990, ix + 226 pp., £28.50.

Aleksa Djilas, The Contested Country: Yugoslav Unity and Communist Revolution 1919–1953. London: Harvard University Press, 1991, v + 259 pp., £27.95 h/b.

Bartlomiej Kamiriski, The Collapse of State Socialism: the Case of Poland. Princeton, NJ: Princeton University Press, 1991, xiv + 264 pp., $39.50 h/b, $14.95 p/b.

David Ost, Solidarity and the Politics of Anti‐Politics. Opposition and Reform in Poland since 1968. Philadelphia, PA: Temple UP, 1990, xi + 279 pp. $34.95.

Roman Laba, The Roots of Solidarity—A Political Sociology of Working Class Democratisation. Princeton, NJ: Princeton UP, 1991, xii + 247 pp., $24.95.

Keith Sword, ed, The Soviet Takeover of the Polish Eastern Provinces, 1939–41. London: Macmillan (in association with the School of Slavonic and East European Studies), 1991, xxiii + 318 pp., £45.00.

William B. Husband, Revolution in the Factory: The Birth of Soviet Textile Industry, 1917–20. New York and Oxford: Oxford University Press, 1990, viii + 227 pp. £25.00.     

Book reviews

Turkey in the Middle East By Philip Robins. Pinter for the Royal Institute of international Affairs. 1991.130 pp. £22.50. ISBNO 86187 198 7. PBk £8.95. ISBN 0 86187 1995.

Hitler Slept Late and other blunders that cost him the war By James P. Duffy. London: Praeger. 1991.176pp. £17.50.

Alliance within the alliance: Franco‐German Military Cooperation and the European Pillar of Defense By David G. Haglund. Boulder: Westview Press, 1991. 213 pp.

Homeward Bound? Allied Forces in the New Germany Edited by David G. Haglund and Olaf Mager. Boulder: Westview Press, 1992. 299 pp. £24.95

Avoiding War: Problems of crisis management By Alexander L. George (ed.), Westview Press, 1991. 590 pp. £16.95.

The Future of NATO: Facing an Unreliable Enemy in an Uncertain Environment By S.N. Drew et al. Praeger Publishers, New York, 1991. pp. 206.

Parliament and international relations Edited by Charles Carstairs and Richard Ware. Milton Keynes: Open University Press, 1991. 195 pp. £12.99 (paperback)