Reducing Structural Dominance and Entry Barriers in Russian Industry

While many industrial firms in Russiahave undergone ownership change, relatively few havecompetitively restructured. This paper, using survey and other data, suggests much of Russian industry is immune from robust competition due to seller/buyer concentration in select markets, a high degree of vertical integration, and geographic segmentation. Regulatory constraints protect incumbent firms from entrants, both domestic and foreign. The absence of new businesses is striking. Restructuringanti-competitive structures and reducing barriers to entry should be key items in Russia'spost-privatization program, and the paper sketches out a reform agenda. The nascent rules-based framework for competition policy should be strengthened to reduce discretion, increase transparency and enhance accountability.