State-Initiated Restraints of Competition
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State-Initiated Restraints of Competition

  • ASCOLA Competition Law series

Edited by Josef Drexl and Vicente Bagnoli

States influence competition in the market in various ways. They often act themselves as market participants through state-owned enterprises. They regulate markets and specific sectors of the economy such as public utilities in particular. In some instances, market regulation explicitly aims to promote competition in the market. In other instances, regulatory schemes and decisions may inadvertently distort competition or openly promote conflicting objectives and even anti-competitive goals. Furthermore, states can distort competition among firms when they act as purchasers of goods and services as well as when they grant subsidies to individual firms. This book assembles contributions by competition law scholars who present new insights on the diversity of problems and challenges arising from state-initiated restraints of competition in jurisdictions from all around the world, not only including the EU and the US, but also Latin American countries, China, India and Australia.
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Chapter 12: Benefits of competition policy in public procurement with special reference to India

S. Chakravarthy

Extract

For most developing and developed countries, government procurement is of great potential interest as it accounts for a substantial proportion of GDP. But the prevalence of discrimination in this area of government procurement, as well as other practices, creates significant barriers to trade, ultimately adversely impacting the countries’ growth and their GDP. Essentially, barriers to efficient and sustainable development are identified as corruption and clientelism in public procurement policies. The WTO is addressing the problem in the form of its Government Procurement Agreement (GPA). And yet, because of the challenges posed by the problems listed above, the GPA, as a mere ‘plurilateral’ agreement, has not been adopted and agreed to by a large number of members of the WTO. This chapter lists the challenges that exist in government procurement and gives an overview of the need for and the features of an appropriate instrument to govern government procurement policies. This chapter also addresses the Indian scenario covering procurement policies, practices and institutions, the reforms undertaken in 2005 and the specific problems and challenges faced by India in this area. In developed and developing countries, the performance of government procurement impacts governance and the interests of citizens. It cannot be gainsaid that performance is positively impacted if procurement is competition driven. For procurement to be pro-citizen interest and pro-good governance, overt and conscious policies promoting effective competition among potential bidders/suppliers are imperative. Absent such policies, a procurement system is unlikely to be healthy.

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