Loss of Efficient Competition in Public Procurement and Market Failure

Document Type : Original Article

Authors

1 Ph.D. in Public Law, University of Tehran

2 (Assistant Professor of Law, Shahid Beheshtie University

3 Ph.D. Student of Private Law, Edalat University

10.29252/jlr.2021.222473.1939

Abstract

Abstract
Both public procurement and competition law represent two of the basic components of market regulation and affect highly on the efficiency and development of economics. Economics has always played a more significant role in competition law while public procurement regulations and practices are a source of market failure. By their inflexible price policies, they generate a big negative impact on market dynamics and impose an efficiency loss on society. The government as the main buyer can cause monopsony and their action in the market can detract from perfect competition. The public procurement regulation may remove a number of suppliers from public market. Whilst government may benefit in the short term from cost-saving and low prices, by these reductions of opportunities and imposing prices on suppliers, the long term effects can be destructive and worse market conditions for fringe buyers—both in terms of reduced variety and (in the long run) in higher prices. In order to justify the view that public procurement is a source of potential distortion in market competition, this research has criticized the monopsony of government and its effects on suppliers and other smaller buyers.   

Keywords

Main Subjects

References

  • منابع

     

    الف-کتاب فارسی

     

    • دی‌لی، روبرت، رونالود دبلیو جانسون، فیلیپ‌جی جویس.. نظام‌های بودجه‎ریزی دولتی در ساختار فدرالی ایالات متحده آمریکا (ویرایش نهم، 2013). ترجمه مسعود روغنی زنجانی. تهران: انتشارات کویر. 1395

     

    ب-کتاب انگلیسی

    • Carstensen, P. Competition Policy and the Control of Buyer Power, The potential competitive harms from the existence and abuse of buyer power, Edward Elgar Pub,  Volume 10, 2017
    • Khi V. T, International Handbook of Public Procurement, London, CRC Press,Taylor & Francis Group, 2009
    • Sánchez Graells, A, Public Procurement and the EU Competition Rules, Second Edition (Hart Studies in Competition Law) , Oxford and Portland, Oregon, Hart Publishing, , 2015

     

     

    ج-مقالات فارسی

    • رستمی، ولی و ایام کمرخانی.. اعمال مقررات حقوق رقابت براعمال حاکمیتی وتصدی دولت. فصل‎نامه مطالعات حقوق خصوصی دانشگاه تهران. پاییز 94، دوره 45، شماره 3 - شماره پیاپی 3 ، صص 431-451

     

    د-منابع الکترونیک

     

     

    • Buyer Power in Competition Law - Status and Perspectives, Meeting of the Working Group on Competition Law on 18 September 2008, p.3 at: https://www.bundeskartellamt.de/ hast visited: 2021/08/03
    • Code of Federal Regulations, Title 48 - Federal Acquisition Regulations System at: https://www.law.cornell.edu/cfr/text/48/5.101 last visited 2021/11/08
    • European Commission. Green Paper on the modernization of EU public procurement policy. Towards a more efficient European procurement market. COM 2011. at:

    http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0015:FIN:EN:PDF last visited: 2021/13/03

    • Federal Funding Accountability and Transparency Act, 2006 at: https://www.govinfo.gov/link/plaw/109/public/282 last visited 2021/11/08
    • Financial Times Lexicon, Waterbed effects meaning, at: http://lexicon.ft.com
    • Grandia, Jolien,and  Meehan, Joanne, Public procurement as a policy tool: using procurement to reach desired outcomes in society, International Journal of Public Sector Management, Vol. 30 Issue: 4, Radboud University Nijmegen, 2017,  at: https://doi.org/10.1108/IJPSM-03-2017-0066 last visited: 2021/11/03
    • Inderst, R, and Tommaso M. Valletti. Buyer power and the 'waterbed effect, The Journal of Industrial Economics 59, no. 1 2011: 1-20.  3
    • Kokkoris, I, Buyer Power Assessment in Competition Law: A Boon or a Menace?, World Competition: Law and Economics Review, Vol.29, No.1, 2006, p.1 available at: https://ssrn.com/abstract=3778887 last visited: 2021/12/03
    • Organization for Economic Co-operation and Development (OECD), Monopsony and Buyer Power, Competition law and policy OECD, 2008, p.245, available at: https://www.oecd.org/daf/competition/44445750.pdf last visited: 2021/12/03
    • Organization for Economic Co-operation and Development (OECD) ,  Round table on monopsony and buyer power, Directorate for Financial and Enterprise Affaires Competition Committee 2008, p 2, at http://www.oecd.org/ last visited: 2021/12/03
    • Organization for Economic Co-operation and Development (OECD), Roundtable on monopsony and buyer power-European Commission (OECD) Publication,2008, p.2 Available at: https://ec.europa.eu/competition/international/multilateral/2008_oct_buyer_power.pdf last visited: 2021/12/03
    • Roger D. Blair and Jeffrey L. Harrison, Antitrust Policy and Monopsony, 76 Cornell L. Rev. 297 1991, Available at: https://scholarship.law.cornell.edu/clr/vol76/iss2/1 last visited: 2021/08/08
    • Steven L. Schooner,(2002) Desiderata: Objectives for a System of Government Contract Law, Public Procurement Law Review, Vol. 11, p. 103, 2002; GWU Law School, Public Law Research Paper No. 37, pp 2-3. Available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=304620 last visited 2021/11/08

     

    ه-آراء و صورتجلسات

     https://www.nicc.gov.ir/council/decisions-council/278-83-1390-07-17.html آخرین بازدید: 21/12/1399

    • رسیدگی و تشکیل کمیته‌های تنظیم مقررات مربوط به بند ۵ ماده ۵۸، پیگیری شکایت پتروشیمی اصفهان و طرح شکایت شرکت بیمه ملت، بیست و هشتمین (28) جلسه شورای رقابت، مورخ 20/04/1389، قابل دسترس به نشانی:

    https://www.nicc.gov.ir/council/decisions-council/327-28-1389-04-20.html  آخرین بازدید: 21/12/1399

    • Weyerhaeuser Co. v. Ross-Simmons Hardwood Lumber Co., Inc., 127 S. Ct. 1069 (2007); In the Supreme Court of the United States, at: https://www.justice.gov last visited: 2021/12/03

     

     

     

     

     

     

    Refrences:

     

    Books:

    • Carstensen, P. Competition Policy and the Control of Buyer Power, The potential competitive harms from the existence and abuse of buyer power, Edward Elgar Pub,  Volume 10, 2017
    • Khi V. T, International Handbook of Public Procurement, London, CRC Press,Taylor & Francis Group, 2009
    • Robert D. Lee, Ronald Wayne Johnson, Philip G. Joyce, Public Budgeting Systems, Translated by Masoud Roghanie Zanjanie, ed 13, Kavir Pub, 1395
    • Sánchez Graells, A, Public Procurement and the EU Competition Rules, Second Edition (Hart Studies in Competition Law) , Oxford and Portland, Oregon, Hart Publishing, , 2015

     

    Articles and Regulations:

    • Buyer Power in Competition Law - Status and Perspectives, Meeting of the Working Group on Competition Law on 18 September 2008, at: https://www.bundeskartellamt.de/ hast visited: 2021/08/03
    • Code of Federal Regulations, Title 48 - Federal Acquisition Regulations System, at: https://www.law.cornell.edu/cfr/text/48/5.101 last visited 2021/11/08
    • European Commission. Green Paper on the modernization of EU public procurement policy. Towards a more efficient European procurement market. COM (2011) at:

    http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0015:FIN:EN:PDF last visited: 2021/13/03

    • Federal Funding Accountability and Transparency Act, 2006 at: https://www.govinfo.gov/link/plaw/109/public/282 last visited 2021/11/08
    • Financial Times Lexicon, Waterbed effects meaning, at: http://lexicon.ft.com
    • Grandia, Jolien,and  Meehan, Joanne, Public procurement as a policy tool: using procurement to reach desired outcomes in society, International Journal of Public Sector Management, Vol. 30 Issue: 4, Radboud University Nijmegen, 2017,  302-309, p.306-7 at: https://doi.org/10.1108/IJPSM-03-2017-0066 last visited: 2021/11/03
    • Inderst, R, and Tommaso M. Valletti. Buyer power and the 'waterbed effect, The Journal of Industrial Economics 59, no. 1 (2011): 1-20.  3
    • Kokkoris, I, Buyer Power Assessment in Competition Law: A Boon or a Menace?, World Competition: Law and Economics Review, Vol.29, No.1, 2006, p.1 available at: https://ssrn.com/abstract=3778887 last visited: 2021/12/03
    • Organization for Economic Co-operation and Development (OECD), Monopsony and Buyer Power, Competition law and policy OECD, 2008, p.245, at: https://www.oecd.org/daf/competition/44445750.pdf last visited: 2021/12/03
    • Organization for Economic Co-operation and Development (OECD) ,  Round table on monopsony and buyer power, Directorate for Financial and Enterprise Affaires Competition Committee 2008, p 2, at http://www.oecd.org/ last visited: 2021/12/03
    • Organization for Economic Co-operation and Development (OECD), Roundtable on monopsony and buyer power-European Commission (OECD) Publication,2008, p.2 at: https://ec.europa.eu/competition/international/multilateral/2008_oct_buyer_power.pdf last visited: 2021/12/03
    • Roger D. Blair and Jeffrey L. Harrison, Antitrust Policy and Monopsony, 76 Cornell L. Rev. 297 1991, at: https://scholarship.law.cornell.edu/clr/vol76/iss2/1 last visited: 2021/08/08
    • Rostami, V., Kamarkhani, A. Application of competition law on government’s authority (Act D’Autorite) and incumbency, Law Quarterly, 45(3), 2015, pp. 431-451. doi: 10.22059/jlq.2015.55028 last visited: 2021/17/06
    • Steven L. Schooner,(2002) Desiderata: Objectives for a System of Government Contract Law, Public Procurement Law Review, Vol. 11, p. 103, 2002; GWU Law School, Public Law Research Paper No. 37. at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=304620 last visited 2021/11/08

     

     

     

    Cases:

     

    • The eighty-third (83) minutes of the Competition Council dated 07/17/2011 At:

    https://www.nicc.gov.ir/council/decisions-council/278-83-1390-07-17.html last visited: 2021/17/06

    • Twenty-eighth (28) meeting of the Competition Council, dated 04/20/2010 At:

    https://www.nicc.gov.ir/council/decisions-council/327-28-1389-04-20.htm last visited: 2021/17/06

    • Weyerhaeuser Co. v. Ross-Simmons Hardwood Lumber Co., Inc., 127 S. Ct. 1069 (2007); In the Supreme Court of the United States, at: https://www.justice.gov last visited: 2021/12/03

     

Files

History

  • Receive Date: 20 June 2021
  • Revise Date: 12 August 2021
  • Accept Date: 15 August 2021

Share

How to cite

Statistics