2004): Globalization and the natural limits to competition

tion; market performance; organization; regulation The chapter begins with a review of the different meanings that are given to the term “competition ” in the economics literature. I follow this by a survey of empirical evidence on returns to scale, of the impact of actual and potential rivalry on productivity growth and on market structure, and draw implications for the benefits, in the sense of improved market performance, that may be expected to flow from globalization. A final consideration of policy restrictions on the mar-ket mechanism suggests that the greatest limitations to competition ∗I am grateful to the editors for offering me the opportunity to prepare this chap-ter, and to Dennis Mueller, Manfred Neumann, and Lars-Hendrick Röller for comments. Responsibility for errors is my own. 1 in global markets may lie in a political unwillingness to accept the re-source reallocations that are part and parcel of the benefits followin