Page 42 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE

exists, competition advocacy should prevent discrimination in favor of

the public authority in terms of access to the essential facility. However,
the experience with public-private-partnership (PPP) programs in many

industrialized countries should also be taken into account in this context.
The competition authority may also inform local authorities of

some of the most common restrictive business practices of service

providers and suppliers, such as bid rigging, and assist them in adopting
practices that prevent or detect such practices. The competition agency

should also strive for transparency and fairness in administering state
aids at the local level.

Privatization

Considerable empirical research has found state-owned enterprises
to be less efficient than privately owned firms and has identified a

diverse set of explanatory factors (the nature of managerial
compensation and incentives, inefficient organizational form and

structure, lack of direct accountability and of hard budgetary constraints
for managers). In most countries state-owned enterprises are insulated

from the discipline of competitive market forces. Aside from benefiting

from government-imposed barriers to entry, price regulations, and
subsidies, state-owned enterprises in most countries (again, countries of

the former Soviet Union are a notable exception) are exempt from the
application of the competition law. In every country that makes a serious

commitment to the development of a market economy, therefore,
privatization of state-owned enterprises has a high priority.

There is an obvious tension in the privatization process between

the desire of the state to obtain the maximum price for the privatized

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