Interesting paper on corruption and (induced) collusion in public procurement (Ostrovnaya & Podkolzina, 2015)

In their recent paper "Antitrust Enforcement in Public Procurement: the Case of Russia" (2015) 11(2) Journal of Competition Law & Economics 331-352, M Ostrovnaya and E Podkolzina of the International Laboratory for Institutional Analysis of Economic Reforms discuss an example of interaction between corruption and (apparent) collusion in public procurement for drugs in Russia. 

I found the paper an interesting read and some of their insights on how corrupt officials can create or consolidate collusion in procurement markets will certainly ring many bells. This was an issue we recently discussed extensively at a knowledge exchange event at the Law School of the University of Sussex, and one that seems to be triggering increased attention in academic and practitioner circles.

Ostrovnaya and Podkolzina's analysis clearly shows that antitrust intervention against the public sector's restrictive procurement practices was resisted by a specific public buyer, which most likely decided to resort to an orchestrated system of bid covers (or passive bidding, as they label it) to avoid further antitrust intervention--thus deviating the attention of the antitrust watchdog towards the behaviour of the (certainly non-innocent) bidders. 

Their case study will be a useful guideline for the development of more effective competition rules applicable to the public sector. Or, at least, a warning against naive assumptions that antitrust intervention can ipso facto exclude issues of (induced) collusion in procurement markets.