How Can Antitrust Laws Promote Human Welfare?
The interactions between political systems and the economic policies that they enforce represent a very complex system of political economy. Raju Parakkal, PhD, an associate professor of International Relations in the College of Humanities and Sciences studies these interactions on a domestic and global scale. He has been at Jefferson since 2011 and his research spans international relations and politics, economics, international finance and history. He was just awarded a fellowship at the University of Bucharest to examine Romania’s economy and further a dialogue about how technological growth could improve the Romanian economy. Read on to find out more about Professor Parakkal’s research story and the questions he’s trying to answer.
Q: What is your field of research?
A: My research projects are in the combined field of international and comparative political economy. This field looks at issues and outcomes at the intersection of politics and economics at the global and domestic levels. Within this broad research area, I specialize in global antitrust laws, economic growth and development, trade disputes, foreign investments and currency reserves. In all of my research, the focus is almost exclusively on the developing world of Asia, Africa, and Latin America and the transition countries of Central and Eastern Europe. I have first-hand experience from living and visiting some of these countries and I put that knowledge to effective use in my academic research.
Q: You seem to have many areas of research. Do you have a primary research question?
A: Global antitrust laws or policies have been my primary area of research in the last decade and half. The one overarching question I ask in all of research is: how can antitrust laws and their implementation promote not just consumer welfare, but human welfare as well? Antitrust laws seek to promote market competition and consumer welfare by preventing firms from engaging in anticompetitive activities, such as colluding with each other to hike prices or exploiting their status as large corporations. For example, American antitrust laws are what prevent AT&T and Verizon from merging to form a large telecom corporation that will most likely become an exploitative monopoly. Until now, my research had largely focused on the spectacular spread of antitrust laws from the West to the rest of the world. Lately, however, with the growth of big tech firms like Google, Facebook and Amazon in developing countries, my attention has also turned to some of the newer challenges of big tech firms in developing and transition countries and the ability of these young antitrust jurisdictions to adequately address these challenges. At the moment, I am working on a manuscript that is tentatively titled “The Globalization of Antitrust Laws” which explores these topics.
Q: How do anti-trust laws come into play during the COVID19 pandemic?
A: Antitrust laws around the world expressly prohibit firms from colluding with each other, because that collusion could restrict supplies or increase prices, or both, for consumers. However, the coronavirus crisis sometimes requires that these competitor firms come to an agreement or cooperation to address the supply shortages of medical equipment needed to attend to this health crisis. For example, the European Union Commission issued a communication allowing “limited cooperation among businesses” for meeting critical hospital needs during the COVID-19 outbreak. The Mexican antitrust authority has gone a step further and said that “…any agreement of collaboration between economic agents that, in the present context of a health emergency, is necessary for maintaining or raising the supply, satisfying the demand, protecting supply chains, avoiding the shortage or hoarding of goods, will not be prosecuted as long as they comply with the law and do not displace competitors in the market.” This is the main development for antitrust laws during this crisis, and it is a major one too because, if the antitrust authorities did not permit such agreements and cooperation between businesses, these businesses would be in violation of the relevant antitrust laws. In turn, that would affect much-needed and urgent medical supplies to hospitals at this critical time. So, I would say, many antitrust authorities have acted quite responsibly to temporarily allow such collaborations during this crisis period.
Q: What first sparked your interest in global antitrust research?
A: All of my political economy research projects have one over-arching motivation: how can my research improve socio-economic conditions in developing and transition countries? Philosophically, I have always believed that competition, if undertaken fairly and for the right reasons, would improve the human condition. Antitrust laws are the closest modern construct we have that promotes market competition. So, it was only natural for me to spend my research energy in this particular area. And, it’s been a fascinating experience thus far.
Q: What’s a cool fact about your research?
A: I am one among just a handful of antitrust researchers around the world who is not a lawyer or mainstream economist. Because of the nature of the subject matter, research in antitrust laws is undertaken predominantly by legal scholars and mainstream economists. But, I am neither. This has allowed me to approach antitrust laws from a holistic perspective that incorporates usually neglected aspects such as political factors and social conditions.
Q: Do you have any latest news you wish to share about your research in general?
A: Actually, I do have some exciting news to share. I was just awarded the Visiting Professors Fellowship at the Research Institute of the University of Bucharest (ICUB), Romania, and I have been invited to spend the summer of 2020 as a visiting professor-in-residence there to undertake this fellowship research. The University of Bucharest is a 150-year old top-ranked university in Romania and has an illustrious history going back to Romania’s communist past. I’m really looking forward to it.
Q: What is your research project for this summer fellowship in Romania? How will it help your research trajectory?
A: My fellowship project is titled “Romania and the Middle-Income Trap: Is a Technology-Led Growth Strategy the Solution?” The project examines the puzzle of Romania remaining a middle-income economy for so long and attempts to propose some solutions to escape this trap. This fellowship will be a major boost to my overall policy research agenda, in general. But, more specifically, it will help me continue my research on the Romanian political economy. It will provide me with an opportunity to engage in sustained scholarly and policy discussions with Romanian scholars at the University of Bucharest and also with other visiting fellows at the Research Institute. I am a member of the Society for Romanian Studies (SRS) and I recently published a research article on the comparative histories of the Romanian and Indian economies.
Q: Many researchers have superstitions. Things they’ve done to cosmically help their experiments succeed. What are yours?
A: I never begin or propose a new project on a Sunday night! I consider Sunday nights inauspicious, based on my personal and professional experiences.
Q: What’s the best part of your job?
A: The best part is the freedom to choose my own research topics and projects. Academics are ‘intellectual entrepreneurs’ and a key ingredient for any entrepreneurship is the freedom to operate and choose. The opportunity to travel around the world and meet fellow scholars ranks equally highly for me.
Q: What’s something people would be surprised to find out about you?
A: I am a polyglot and I am learning my fifth language now – Romanian. I have an online tutor, who is based in Romania. She keeps me focused on my daily lessons, as it’s easy to fall behind, especially with my heavy workload at the university.