Cartels, Competition and Public Procurement

Cartels, Competition and Public Procurement

Law and Economics Approaches to Bid Rigging

New Horizons in Competition Law and Economics series

Stefan E. Weishaar

Stefan Weishaar explores the ways in which economic theory can be used to mitigate the adverse effects of bid rigging cartels. The study sheds light on one of the vital issues for achieving cost-effective public procurement – which is itself a critical question in the context of the global financial crisis. The book comprehensively examines whether different laws deal effectively with bid rigging and the ways in which economic theory can be used to mitigate the adverse effects of such cartels. The employed industrial economics and auction theory highlights shortcomings of the law in all three jurisdictions – the European Union, China and Japan – and seeks to raise the awareness of policymakers as to when extra precautionary measures against bid rigging conspiracies should be taken.


Stefan E. Weishaar

Subjects: economics and finance, competition policy, law and economics, public finance, law - academic, competition and antitrust law, law and economics, politics and public policy, public policy


A comparison of international procurement data shows that China’s public procurement is limited in terms of GDP. While the real influence of the public sector may be understated by a mere comparison of figures, it is noticeable that Chinese government procurement only accounted for around 1.6 per cent of GDP in 2008. Differences are noticeable not only in terms of the relative size, but also in terms of the absolute size of the procurement market. While exact data on the occurrence of bid rigging conspiracies is not available and academic research is virtually absent with regard to the Chinese situation, a number of observations can still be presented. According to the United States Trade Representative, public procurement prices in the Japanese construction market are inflated by up to 30 per cent as a result of bid rigging conspiracies. Without any sound economic analysis this finding is, of course, not directly applicable to the Chinese public procurement market for construction projects.

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