Access of firms to public procurement in Russia in the 2000s : before and after radical reform of regulation

Abstract

This paper considers the main consequences of the radical reform of public procurement in Russia carried out in 2005-2006. Using data from two surveys of manufacturing enterprises in 2005 and 2009 we show that before the reform firms with government stakes, old firms (established before 1992) and larger firms had advantages in access to government orders. Our analysis of the 2009 data demonstrated substantial growth in the share of firms participating in government procurements. Large firms retain their advantages in access to government orders. The fact of having fulfilled government orders in 2005 has a positive influence on a firm s participation in government procurements in 2009. Estimated scales of kickback in 2009 were virtually the same as in 2005. Our analysis of the 2009 data also revealed that factors of active restructuring of the enterprises had no influence on the enterprises access to government orders. The results of our analysis enable us to conclude that the principal goals of the radical reform of public procurement in Russia were never achieved. We discuss the reasons for this failure and provide some policy implications. Keywords: Russia, regions, corruption, government, procurement