About some risks of the state in the spending taxpayer`s money: analysis of primary method of public procurement in Russia

D. S. Khvalynsky ()

Journal of Modern Competition, 2014, issue 4, 83-92

Abstract: The aim of this work is the analysis of foreign practice of auctions concerning the stability of the expected revenue. In 1961 W. Vickrey noted that in conditions of risk aversion of the participants Dutch auction is more profitable than English one. In 1984 Maskin and Riley complement that the same result should take place if the auctioneer is risk-averse, and the participants are risk-neutral. Complementing the above works, the author shows the advantage of the first-price auctions in the presence of high risk participants and makes the conclusion, that the same form of auctions should choose risk-neutral organizer of public procurement system, as the participants of the procurement system is not neutral to risk.Despite the findings, the author notes consistent implementation of English reverse auctions in the Russian system of public procurement, beginning with 2006. The author shows that, despite the large «random» high efficient e-auctions, the overall efficiency of English reverse auctions in Russia is significantly lower than the less risky auction forms and even lower then «beauty contest», the main competition in which occurs with non-price criteria. The author reveals the negative externalities of English reverse auctions in Russia to the market conditions and offers to provide immediate transition of the Russian public procurement to less risky auction forms.

Keywords: identification of suppliers (contractors; public order; public procurement; efficiency; competition; contract system in the sphere of procurement; auction; executors) (search for similar items in EconPapers)
Date: 2014
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