Reducing Structural Dominance and Entry Barriers in Russian Industry
Harry G. Broadman
World Bank - Europe and Central Asia Region
Review of Industrial Organization
While many industrial firms in Russia have undergone ownership change, relatively few have competitively restructured. This paper, using survey and other data, suggests much of Russian industry is immune from robust competition due to seller/buyer concentration in select markets, a high degree of vertical integration, and geographic segmentation. Regulatory constraints protect incumbent firms from entrants, both domestic and foreign. The absence of new businesses is striking. Restructuring anti-competitive structures and reducing barriers to entry should be key items in Russia's post-privatization program, and the paper sketches out a reform agenda. The nascent rules-based framework for competition policy should be strengthened to reduce discretion, increase transparency and enhance accountability.
JEL Classification: D42, D81, K21, L42
Date posted: August 30, 2000
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