Cartels, Competition and Public Procurement
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Cartels, Competition and Public Procurement

Law and Economics Approaches to Bid Rigging

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.
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Law and Economics Approaches to Bid Rigging

Stefan E. Weishaar


Little more than two decades ago, Japan was widely regarded as being one of the strongest economies in the world, about to overtake the United States. Much feared as an overwhelming competitor, it was praised for its low unemployment figures, its harmonic labour relations, quality improvement practices (kaizen), its good supplier relations, its effective ministerial guidance and social peace. Much of what was formerly seen as its key assets in growth are currently viewed as its liabilities, hindering progressive change. Reform was often seen to be obstructed by senior politicians, bureaucratic considerations and the vested interests of some business sectors to maintain the status quo. Today, the intimate relationship between bureaucrats, politicians and business – known as the “iron triangle” – has lost much of its power. Doubtless, in its recent history, Japan has faced a number of socioeconomic problems, which demanded prompt and cohesive attention. Among these were bad debts, which have piled up as a result of the investment bubble and have led the financial sector to the brink of a banking crisis. Given the opaqueness of the system with its strong monopolization of information, predictions of the magnitude of the bad debts have ranged from 8 to 30 per cent of the gross domestic product (GDP).

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