Corruption in Public Procurement: efficient and quasi-efficient

Abstract

In the public procurement legislation of the Russian Federation auctions are considered to be the primary procurement method. Having originally introduced live outcry auctions, the Russian authorities were forced to replace them with e-auctions due to many cases of collusion. However first results of applying of e-auctions unexpectedly revealed a significant reduction in the competition in the auctions. The paper argues that this reduction cannot be explained only by corruptive behavior of the mala fide contracting authority trying to limit the competition in the favor of the selected supplier for kickbacks. The paper treats the hypothesis of buyer's quasi-corruptive behavior: the bona fide contracting authority is trying to limit the competition in the favor of the selected supplier too but for avoiding the risks which items from the applying English auction for purchasing of the differentiated goods.