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Market Concentration and Competition in Eastern Europe

Paul A Kattuman and David M Newbery ()

No 664, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: A key feature of Soviet-type economies is the excessive concentration of production and the skewed size distribution of enterprises. This is the root cause of the `soft budget constraint' and a natural outcome of the political economy of these countries. Given entrenched political support for a system which favours producers relative to consumers, it will be hard to pursue an active competition policy, though it is essential for successful reform. We examine a hypothetical restructuring of Polish state enterprises and argue that this should be undertaken before they are privatized. Hungary appears to have started such a process already.

Keywords: Competition Policy; Concentration; Eastern Europe; Enterprise Size Distribution (search for similar items in EconPapers)
JEL-codes: L11 L23 O12 P23 P51 P52 (search for similar items in EconPapers)
Date: 1992-04
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