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What impact does antitrust intervention have on competition? The case of public drug procurement in Russia

Author

Listed:
  • Maria Ostrovnaya

    (Center for Institutional Studies at the National Research University Higher School of Economics)

  • Elena Podkolzina

    (Ph.D. in economics, Senior Researcher in the Center for Institutional Studies at the National Research University Higher School of Economics)

Abstract

In this paper we study antitrust intervention in long-term relationships between public procurer and his preferred supplier in one of the Russian regions. We presume that antitrust control of auctions held by affiliated procurer increases the risks of implementing long-term relationships with his preferred supplier. However we found out that after the intervention of antitrust agency the number of bidders in the auctions increased, but relative contract prices remained the same. We argue that procurer and preferred bidder invited firm with passive bidding strategy to decrease the risks of antitrust punishment. Thereby, antitrust intervention led to fake competition, but not to honest non-corrupt behavior in public auctions

Suggested Citation

  • Maria Ostrovnaya & Elena Podkolzina, 2013. "What impact does antitrust intervention have on competition? The case of public drug procurement in Russia," HSE Working papers WP BRP 32/EC/2013, National Research University Higher School of Economics.
    • Handle: RePEc:hig:wpaper:32/ec/2013
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    File URL: http://www.hse.ru/data/2013/07/23/1288609861/32EC2013.pdf
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    References listed on IDEAS

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    5. Frédéric Boehm & Juanita Olaya, 2006. "Corruption In Public Contracting Auctions: The Role Of Transparency In Bidding Processes," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 77(4), pages 431-452, December.
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    Cited by:

    1. Anna Balsevich & Elena Podkolzina, 2014. "Indicators Of Corruption In Public Procurement: The Example Of Russian Regions," HSE Working papers WP BRP 76/EC/2014, National Research University Higher School of Economics.

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    Keywords

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    JEL classification:

    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General

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