Why managers form cartels and why it is hard to stop them

This paper looks at the main drivers behind a manager’s decision to engage in cartel activity and the challenges of addressing them. Managers generally form cartels for three reasons: (i) ignorance of the law, or at least of its full application and consequences; (ii) crises or the fear of bankruptcy/loss of employment; and (iii) arrogance or a wilful disregard of the law. It is argued that weak popular understanding of cartels and the challenges of ensuring personal consequences for those who form them (whether state sanctions or internal corporate disciplinary tools) mean the current approach to cartel enforcement requires further development.