18. Problems of creating a competitive environment and counteracting monopoly in a transitional economy

Features of the structure of markets in transition economy:

1) The structure of the markets is characterized by an overestimated level of concentration in many industries.

2) Significantly lower level of product differentiation.

3) Lack of full-fledged information, financial and legal infrastructures of the market, which enhances monopoly effects in the economy.

A special factor that distorts the formation of a normal market environment in a transitional economy is the behavior of power structures that actively intervene in the economy (support for individual enterprises by providing tax incentives and subsidies; too complicated bureaucratic registration procedures, etc.).

The growth of the non-monetary economy and the shadow sector (characteristic of the conditions of the transition period) testify to the inefficiency of the forms of state regulation used, both at the micro and macro levels.

Types of competitive behavior of firms:

1) traditional, inherent in a developed market economy;

2) specific forms of rent seeking inherited from the command economy (waiting for support from the authorities, fighting for benefits, failure to fulfill obligations to the state);

3) associated with the underdevelopment of market institutions and the crisis economic environment of the transition period (failure to fulfill obligations to creditors, non-payment of wages, barter and other types of non-monetary payments, production of unregistered products, use of unregistered labor and other resources).

Specific types of barriersinherent in the markets of the transitional economy:

1) actions of public authorities at all levels in the process of state regulation of the economy;

2) barriers of a criminal nature, posing a threat not only to fair competition, but also to economic development in general;

3) the strategic behavior of enterprises using the described specific forms.

When assessing the degree of surmountability of market entry barriers, it is recommended to use the criteria of timeliness, probability and sufficiency of new entities entering the market.

Timely - carried out within two years from the start of pre-planning to the realization of a significant market impact.

Likely - profitable at prices that are expected to operate on the market in the relevant period of time, and their level is guaranteed by the volume of supplies of goods by market participants.

Sufficient - carried out on a scale that ensures the preservation and development of competitive relations between participants.

Author: Ilyina V.N.

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