Access of Firms to Public Procurement in Russia in the 2000s : Before and After Radical Reform of Regulation

This paper considers the main consequences of public procurement reform in Russia in 2005-2006. Using data from two surveys of manufacturing enterprises 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. Firm's participation in public procurements in 2005 had a positive influence on the access to government orders in 2009. Estimated scales of “kickback” in 2009 were virtually the same as in 2005. Our analysis of the 2009 data also revealed that active restructuring of the enterprises had no influence on the enterprises' access to government orders. We 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