The Role of Institutions in Generating Successful Legal Transplants:: a Comparative Analysis of the Adoption of Competition Laws in India and Pakistan

In recent years, several developing countries have adopted regulatory laws to remain relevant in an increasingly globalized world and to make a successful transition from protected to market economies. Whilst developing countries and multilateral organizations supporting them are aware that in order to succeed adopted laws must be compatible with the context for which they are intended, there is less clarity as to the processes through which compatibility is generated. This article draws upon comparative law and development economics literature to argue that the compatibility of a transplant is shaped by the interplay of institutions through which it is adopted. The article also argues that in addition to compatibility, a transplant must enjoy a degree of legitimacy to be effective in the adopting country and the institutions which generate compatibility may also enhance such legitimacy. In order to understand the compatibility and legitimacy-generating potential of the interplay of adopting institutions in developing countries, the article examines and compares the adoption of competition laws by India and Pakistan in 2002 and 2007 respectively. The article also examines the impact of legitimacy on the post-adoption interpretation of competition law transplants and its significance for their implementation in either country.