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Antitrust Law Journal

Volume 85, Issue 2

The Political Economy of the Decline of Antitrust Enforcement in the United States

Filippo Lancieri, Eric Andrew Posner, and Luigi Zingales


  • Antitrust enforcement in the United States has declined, particularly since the 1970s. Building on several new datasets, we argue that this decline did not reflect a popular demand for weaker enforcement or any other kind of democratic sanction.
  • We show that the decline in antitrust enforcement was engineered by unelected regulators and judges who, with a few exceptions, did not express skepticism about antitrust law in confirmation hearings.
  • We find little evidence that academic ideas played an important role in the decline of antitrust enforcement except where they coincided with the interests of big business, which, in our view, appears to have exercised influence behind the scenes.
The Political Economy of the Decline of Antitrust Enforcement in the United States
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According to a familiar narrative, the demise of antitrust enforcement in the United States was caused by the spreading of the “Chicago School” approach to antitrust. In the late 1960s and the 1970s, economists and law professors affiliated with or trained at the University of Chicago challenged U.S. antitrust law by arguing that the antitrust doctrine prevailing at the time was incoherent and harmful to competitive markets. These scholars argued that antitrust should be based on economic principles of price theory and industrial organization, with emphasis on maximizing efficiency or consumer welfare. Drawing on those principles, they argued that antitrust law and enforcement should be narrowed. These ideas found receptive ears in different administrations and in the U.S. judiciary, which (with exceptions to be discussed) significantly reduced antitrust enforcement.

We will call this theory the “enlightened technocratic narrative” because it claims that the ideas of experts were the primary drivers that influenced law and public policy. The major evidence for this theory is that Chicago School ideas (and accompanying citations) made their way into Supreme Court opinions, lower court opinions, and various guidance documents issued by regulators, and that law and enforcement priorities moved radically in the direction of Chicago views in the decades following their publication.

However, this narrative raises several issues:

First, the stated objective of the Chicago School approach was to improve antitrust enforcement and increase market competition by focusing antitrust policy on the most serious violations (for example, price fixing), while limiting its impact on other types of commercial behavior that could be understood as procompetitive (for example, vertical restraints). Yet the evidence indicates that market competition declined, and markups increased during the Chicago School ascendency.

Second, the Chicago School approach was almost immediately challenged by economists who rejected its simple price-theoretical approach—many drawing on the burgeoning fields of game theory and information economics. By the 1980s and 1990s, the “post-Chicago” approach had largely overtaken the earlier Chicago view in economics departments and law schools. If the enlightened technocrat story were to be believed, the post-Chicago view would have displaced the Chicago view in law and policy (especially in judicial decision-making), but it has not, except on the margins.

Third, the enlightened technocrat narrative does not explain (or demonstrate) causation between the emergence of the ideas and the implementation of policy. Indeed, it flies in the face of another contribution of the University of Chicago: public choice theory (which uses economic tools to explain the behavior of public institutions and government officials). Public choice theory challenged the general presumption that governmental action is driven by the pursuit of the public interest—arguing instead that it is the self-interest of public officials and private companies that drives regulation. George Stigler, an exponent of the Chicago School, built on these insights to famously affirm that “as a rule, regulation is acquired by the industry and is designed and operated primarily for its benefit.” Yet, the technocratic narrative assumes exactly the opposite—that an antitrust law that benefited inefficient producers was replaced by an antitrust law that advanced the public interest.

In this paper, we focus on the political economy of the decline of antitrust enforcement between the 1950s and today, probing whether U.S. antitrust policy (courts and regulatory agencies) have been captured by special interests, and by what means. We argue that it has.

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