ACMDs are market distortions that lessen competition. The lessening of competition is determined by reference to the impact of the distortion on consumer welfare in the economic sense. ACMDs involve government action (embodied in laws, regulations or policies) that empower certain private interests to obtain retain artificial competitive advantage over their rivals, be they foreign or domestic.
Originally conceptualized by Shanker Singham, the term ACMD was first coined by Shanker Singham and Alden Abbott in 2011. Since that time, significant studies have been conducted by a group of experts led by Shanker Singham in order that ACMD could be used in an econometric model. (See Research Papers.) This has enabled ACMD to be included now in economic forecasts, analysis and policy making.
Most recently, the Growth Commission has incorporated an ACMD model to demonstrate alternatives for the UK budget in the Growth Budget, published by the Growth Commission. The full report can be viewed here, while Appendix 1, which discusses the ACMD model is excerpted and available below, along with an earlier study developing the ACMD model.