‘Cartels as Children of Hard Times, Antitrust Recidivism, and the Managerial Firm’

For this Friday’s research seminar, the Centre is delighted to welcome Professor Steve Martin (Krannert School of Management, Purdue University) who will be presenting his research on ‘Cartels as Children of Hard Times, Antitrust Recidivism, and the Managerial Firm‘. Steve presented an earlier version of this paper at the 39th Annual EARIE Conference in September of last year, a version of which is available for download here. A short abstract for his article can be found below.

Abstract

In industries where the technology requires large fixed and sunk investment and there are severe demand fluctuations, in downturns decision-makers face a loss of control if they collude and are caught and they face a loss of control if they do not meet financial obligations. In these circumstances, corporate fines for detected collusion are unlikely to provide effective deterrence.

Steve will also be speaking as part of the CCP’s Summer Conference which is taking place next week. An abstract for his presentation on ‘Shaping U.S. Antitrust Institutions’ can be downloaded from our profiles page, along with the abstracts of our other guest speakers.

CCP Seminar: Two Surprises in Railways Restructuring

The CCP is delighted to welcome Russell Pittman (Antitrust Division, US Department of Justice) to the Centre this week. He will be revealing ‘Two Surprises in Railways Restructuring’ which is based on findings from 2 of his recent articles.  The seminar is to take place on Friday 17th May in Room 0.1 of the Thomas Paine Study Centre. An abstract for Russell’s seminar can be found below.

Abstract

Policy analysts and scholars have devoted a great deal of attention in recent years to the roles of the old “natural monopoly” sectors in the economy.  As a result, both privatization and restructuring have been widely implemented, often with the goal of substituting competition for regulation where feasible – for example, in electricity generation, mobile telephony, and above-track railway operations.  This presentation reviews the main questions in these debates and then focuses on the railways sector, where very different reform strategies have been used on the two sides of the Atlantic, and where debates continue especially as one moves further east, with South Korea and Russia two prime examples.  These two countries exhibit two “surprises” for long-term participants in the debate:  1) Perhaps it is possible to create above-track competition in passenger operations, and 2) Perhaps there is an alternative locus for “vertical separation” besides that between trains and tracks.

Further reading:

Russell Pittman, ‘The freight railways of the former Soviet Union, twenty years on: Reforms lose steam’ (2013) 6 Research in Transportation Business & Management 99-115; available via SciVerse ScienceDirect.

Russell Pittman and Sunghee Choi, ‘The Economics of Railways Restructuring in South Korea’ (2013); Working Paper available via SSRN.

CCP Seminar: Reforming the UK Cartel Offence

The CCP’s Spring seminar series continues on Friday 10th May as Peter Whelan (CCP and UEA Law School) offers his take on ‘Reforming the UK Cartel Offence‘. Since the UK reforms were first proposed back in 2011, Peter has been a prominent voice during the consultation period and beyond. An abstract for his seminar can be found below.

Abstract

In March 2011, the Department for Business, Innovation and Skills (‘BIS’) began a public consultation on the reform of the UK competition regime. BIS initially proposed four different options for the reform of the UK Cartel Offence, the criminal law which provides for up to 5 years of imprisonment for convicted cartelists. In its final report in 2012 BIS advocated the removal of the ‘dishonesty’ element from the Cartel Offence and the ‘carve out’ from the offence of agreements made openly (‘Option 4’). On 25 April 2013 the Royal Assent was given to legislation implementing BIS’s recommendation: Enterprise and Regulatory Reform Act 2013. Entering into force later this year, this piece of legislation also provides for additional (controversial) amendments to the UK Cartel Offence.

This presentation aims both to explain and to examine critically this particular reform of the UK Cartel Offence. In order to do so, the presentation is divided into the following parts: Part I: Introductory Comments; Part II: BIS’s Consultation Document; Part III: My Response to the Consultation Document; Part IV: Other Responses to the Consultation Document; Part V: The Government’s Response; Part VI: Legislative Change; and Part VII: Final Comments.

See also Peter’s blog post from April 2012 on the rejection of ‘dishonesty’ under the reformed cartel offence.

CCP Seminar: Fiscal decentralisation and efficiency of public service delivery: the case of UK and China

The CCP’s Spring seminar series continues on Friday 3rd May with our resident research associate Minyan Zhu (CCP). She will be presenting her research on ‘Fiscal decentralisation and efficiency of public service delivery: the case of UK and China‘ which has been conducted alongside Antonio Peyrache (University of Queensland). An abstract for her seminar can be found below.

Abstract

We consider government inefficiency in delivering public services for the UK and China by using a production model where one input (government expenditure at regional level) produces outputs in main service areas including education (teacher availability and student achievements), health services (doctor and hospital bed availability), transport (road traffic flows and public transport availability) and housing (affordability). We use two different regional level datasets separately for the UK and China over the period from 2000 to 2010. The reason for choosing these two countries is that they show very different levels of fiscal centralisation/decentralisation.

In the UK local authorities’ expenditure accounts for around a quarter of total government expenditure and public services in each region are mainly funded and delivered by the central government. On the contrary in China, local governments (financed mainly by local tax revenue) are the key provider of public services in each region. Local government expenditure accounts for more than 80% of total government expenditure in 2010.

We firstly construct and estimate an inefficiency measurement that measures the overall inefficiency of each system against the production possibility sets defined at the national level. We then compare in each system whether inefficiency arises from inefficient performance within regions or from inefficient organisation of resources across regions.  Preliminary results show that the inefficiency regarding the public service provision in the UK is attributed more to inefficient organisation of resources across regions than to inefficiency within individual regions; whereas in China, inefficiency is attributed more to inefficient performance at regional level than to organisation of resources across regions.