MINISTRY OF EDUCATION AND SCIENCE OF THE RUSSIAN FEDERATION
Moscow State University
Economics, Statistics and Informatics (MESI)
in the discipline "Microeconomics"
on the topic of: " Natural monopolies and their regulation
MOSCOW 2013
Introduction
1. The concept of natural monopoly
2.Methods of regulation of natural monopoly
Conclusion
Introduction
There is a huge number of different market conditions, which allows us to talk about the imperfection of markets and consider the monopoly component as the cause of this imperfection.
Markets in which either buyers or sellers take into account their ability to influence the market price are imperfectly competitive. A monopoly position is desirable for every manufacturer (entrepreneur), because avoids a number of problems and risks associated with competition. And also a monopoly position enables the manufacturer (entrepreneur) to independently limit competition in the market of a certain product and influence the pricing process, achieving favorable prices for higher profits.
Monopoly is an extreme case of imperfect competition where there is only one seller and there is no room for others to enter.
The topic of natural monopolies is one of the most relevant in countries with market economies, because the welfare and life of society directly depend on the action of natural monopolies. The Russian Federation can be especially distinguished, where the legislative framework far from ideal and rather unstable socio - economic situation. To ensure a high standard of living and build a stable economy in the state, it is necessary to take into account the factor of natural monopolies.
1. The concept of natural monopoly
Natural monopoly arises due to objective reasons. It reflects a situation where the demand for a given product is best satisfied by one or more firms. It is based on the features of production technologies and customer service. Here competition is impossible or undesirable. The main features of a natural monopoly are:
a) The activities of natural monopoly entities are more efficient in the absence of competition, which is associated with significant economies of scale and high semi-fixed costs. Such areas include, for example, transport.
b) High barriers to entry, since the fixed costs associated with the construction of structures such as roads, communication lines are so high that the organization of a similar parallel system that performs the same functions (building roads and pipelines or laying a railway track is problematic) is hardly whether can pay off.
c) Low elasticity of demand, since the demand for products or services produced by natural monopoly entities is less dependent on price changes than the demand for other types of products (services), since they cannot be replaced by other goods. These products meet the most important needs of the population or other industries. Such goods include, for example, electricity. If we propose, rising car prices will make many consumers refuse to buy their own car, and they will enjoy public transport, then even a significant increase in electricity tariffs is unlikely to lead to a refusal to consume it, since it is difficult to replace it with an equivalent energy carrier.
d) The network nature of the organization of the market, that is, the presence complete system networks extended in space, through which a certain service is provided, including the presence of an organized network, which requires management and control from a single center in real time.
Natural monopolies are due to barriers to competition erected by nature itself. For example, a firm whose geologists have discovered a deposit of unique minerals and which has bought the rights to a land plot where this deposit is located can become a monopolist. Now no one else will be able to use this deposit: the law protects the rights of the owner, even if he ended up as a monopolist (which does not exclude the regulatory intervention of the state in the activities of such a monopolist).
Techno-economic monopolies can be called monopolies, the emergence of which is dictated by either technical or economic reasons associated with the manifestation of economies of scale.
monopoly economy national
2. Methods of regulation of natural monopoly
Regulation of the activities of natural monopolies is a complex process involving a large number participants from state bodies and various non-profit organizations acting both in the interests of consumers and the monopolies themselves.
Natural monopoly legislation establishes monopoly rights in a number of "infrastructural" sectors, as well as the specifics of the disposal of property in these sectors.
In accordance with Art. 3 of the Law on Natural Monopolies, a natural monopoly entity is an economic entity (legal entity) engaged in the production (sale) of goods under natural monopoly conditions. The concept of a subject of natural monopoly does not include the condition for inclusion in the Register of subjects of natural monopolies, in respect of which state regulation and control is carried out, and the condition for approving prices (tariffs) for the provision of gas transportation services. The fundamental feature of the subject of natural monopoly, based on the definition given in the Law on Natural Monopolies, should be considered the implementation by the subject of activities in the conditions of natural monopoly.
In accordance with the order Federal Service according to tariffs dated September 26, 2004 No. 59 “On approval of the temporary regulation on the register of natural monopoly entities subject to state regulation and control” The register of natural monopoly entities is a database containing paper and electronic form information about business entities ( legal entities) engaged in the production (sale) of goods (services) under the conditions of a natural monopoly in the fuel and energy complex, in transport, communications (name, legal and postal addresses, bank details, telephone numbers, codes, data on the volume of services provided, revenue, etc.). d.).
The register of subjects of natural monopolies is of a declarative nature and is formed on the basis of information received from federal executive authorities, executive authorities of the constituent entities of the Russian Federation and local governments, consumer public associations, their associations and unions, as well as upon the application of the organizations themselves to include them in Register, or their exclusion from the Register.
Chairman of the Government of the Russian Federation Vladimir Putin, by order N691-r of May 19, approved the program for the development of competition in the Russian Federation and the action plan for the implementation of the program for the development of competition in the Russian Federation for 2009-2012. The program says that in order to improve the system of regulation of natural monopolies, it is necessary to implement the following measures:
amendments to the federal law "On Natural Monopolies", providing for a clarification of the concept of a natural monopoly entity, determining the status of the register of natural monopoly entities and the procedure for controlling economic concentration, delimiting the powers of natural monopoly regulatory bodies;
introduction into the state regulation system of a number of industries of the method of economically justified return on invested capital, the method of comparative analysis and other "quasi-competitive" mechanisms that provide for the establishment of a long-term tariff that provides an acceptable rate of return on invested capital, as well as a mechanism that stimulates cost reduction and maintaining a certain level service quality;
ensuring the efficiency of procurement activities of subjects of natural monopolies by establishing mandatory requirements to bidding. Such procedures should ensure transparency and competitiveness in bidding, which will reduce the costs of natural monopoly entities and help reduce tariff growth;
separation from the sphere of activity of subjects of natural monopolies certain types works that can be performed by third-party companies on a competitive basis (for example, the implementation of part of the work on connecting to utility infrastructure systems);
intensification of work on the development of competition in areas associated with natural monopolies, including by dividing entities into those carrying out competitive and natural monopoly activities. One of the important steps towards the implementation of this task is the development of methods for maintaining separate accounting specified types of activities;
adoption of rules for non-discriminatory access to the services of subjects of natural monopolies.
An important anti-crisis measure is to support demand by expanding purchases for government needs, as well as the needs public corporations and subjects of natural monopolies.
monopoly economy natural
Conclusion
For the development of the economy, it is necessary to regulate the activities of natural monopolies, but it is regulation, and not fragmentation. Natural monopolies can not only organically fit into the region's economy, but also raise its level to unprecedented heights. The problem of regulation of natural monopolies has always had a special place. Maintaining a balance between the interests of the population and the monopolists is a very difficult task. To do this, it is necessary to determine tariffs in the most efficient and fair way, taking into account the interests of both parties. It is also necessary to encourage natural monopoly enterprises to reduce production costs and improve the quality of service. To carry out all these tasks, regulatory bodies for natural monopolies have been created. Before making any decision to change regulation, regulators conduct a thorough analysis of the industry, taking into account all the necessary aspects of their activities.
Bibliography
1. Burkeeva R.G. Nature and functions of natural monopolies / R.G. Burkeeva // Bulletin of the Orenburg State University. - 2010. - No. 8 (114), August. - S. 9-11. - Bibliography: p. 13 (14 titles).
Varlamova A.N. Natural monopolies: concept, difference from related institutions, problems of legal regulation / A.N. Varlamov // Legislation, 2006. - No. 4. - P. 26.
Knyazeva I.V. Antitrust policy in Russia: tutorial. - M.: Omega - L. - 2009, - S. 256.
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MINISTRY OF AGRICULTURE OF THE RUSSIAN FEDERATION
FEDERAL STATE EDUCATIONAL INSTITUTION OF HIGHER PROFESSIONAL EDUCATION
PERM STATE AGRICULTURAL
ACADEMY IM. ACADEMICIAN D.N. PRYANISHNIKOVA
Department of Economic Theory
COURSE WORK
By discipline: economic theory
On the topic: Natural monopolies: the need and forms of their regulation
Completed by: student of the Faculty of Economics,
finance and commerce full-time
training in the direction of "Commerce"
Islamatdinov Ranis Gapbarovich
Code: Kb-3697-2011
Supervisor: senior lecturer Loginova V.V.
Introduction
Theoretical approaches to the formation of the concept of "natural monopoly"
1 History of natural monopolies
2 The concept of natural monopoly
3 Legal support of natural monopolies
Antimonopoly regulation in Russia
2 Methods of antimonopoly policy in Russia
3 Prospects for the development of Russia's accession to the WTO
Conclusion
Introduction
The problems of monopolization of economic life, competition in commodity markets today attract close attention not only of specialists, but also of the general population.
Since the beginning of the 1990s, these problems have become acute for Russia: without taking firm and consistent measures against monopoly, one cannot hope for the success of economic reform and the transition to market economy. The success of economic reforms to a large extent depends on a balanced, well-considered system of state regulation of monopoly processes and competitive relations. In our country, whose industry inherited a whole complex of monopoly giants from the command and control system of the former USSR, the problem of demonopolizing the economy and preventing the strengthening of the role of monopolies already operating in the market is becoming especially important.
Monopoly is an extreme case of imperfect competition where there is only one seller and there is no room for others to enter.
If the production of any volume of output by one firm is cheaper than its production by two or more firms, then the industry is said to be called a natural monopoly.
Monopolies, having an exclusive position, eliminate competitors everywhere, thereby destroying the normal market, reduce the quality of products, ignoring the achievements of scientific and technical progress, and cause a decrease in the overall efficiency of production.
The attitude of the public and the state towards various forms of monopolies is always ambivalent due to the contradictory role of monopolies in the economy. Monopolies restrict output and set higher prices due to their monopoly position in the market, which causes misallocation of resources and increases income inequality. Monopoly lowers the standard of living of the population. Monopoly firms do not always use their full potential to provide scientific and technical progress. Monopolies do not have sufficient incentives to increase efficiency through scientific and technical progress, as there is no competition.
Among the most important economic functions modern state includes the development and implementation of antitrust policy.
Trying to compensate for the imperfection of the market, the state, resorting to various methods and methods, chooses the most appropriate for a particular task. The most important of these tasks is to eliminate the consequences generated by market imperfections.
To counter the monopolization of markets and protect competition, the state:
- develops laws on the basis of which it is possible to identify and punish firms caught in monopolization;
- helps to create new firms that can counteract the monopolization of markets or destroy it (this is done in our country by the Committee for the Support of Small Business).
– State regulation plays an important role in maintaining the necessary level of competition in the economy.
The essence of antimonopoly policy is a system of laws that restrict the actions of companies, leading to a reduction in competition and the elimination of monopoly. The effectiveness of such a policy depends on three critical elements:
- the nature of the laws themselves;
– interpretation of laws by courts;
- the sequence in which judgments are brought to life.
All three elements change over time and, accordingly, the essence of antitrust policy changes.
The topic of regulation of natural monopolies is especially relevant in Russia, since the legislative framework in it is still very poorly developed, and in order to create a normal functioning of the commodity market, it is necessary to take into account the factor of natural monopolies.
In Russia, the process of creating state control to prevent unfair competition actually began from scratch, since the command-administrative system that was present in the management of the economy until recently, essentially excluded the presence of free competition in economic activity.
This term paper is the study of monopolization and antitrust regulation in Russia.
To achieve the goal, it is necessary to perform the following tasks:
To reveal the basic concepts of natural monopoly and the reasons for its occurrence.
Determine the role of state regulation in Russia and features of antimonopoly legislation.
1. Theoretical approaches to the formation of the concept of "natural monopoly"
1 History of natural monopolies
At the end of the 19th century, the market, almost for the first time in its long history of development, faced complex problems. There was a real threat to the functioning of competition - this necessary attribute of the market. Significant obstacles have arisen in the way of competition in the form of monopoly formations in the economy.
The history of monopoly reaches deep antiquity. Monopolistic tendencies in various forms and to varying degrees manifest themselves at all stages of the development of market processes and accompany them. But their recent history begins in the last third of the 19th century, especially during the economic crisis of 1873. The interconnectedness of phenomena - crises and monopolies - points to one of the reasons for monopolization, namely: the attempt of many firms to find salvation from crisis shocks in monopolistic practice. It is no coincidence that monopolies in the then economic literature were called "children of the crisis."
The main sign of a monopoly formation (monopoly) is the occupation of a monopoly position. The latter is defined as the dominant position of the entrepreneur, which gives him the opportunity to independently or together with other entrepreneurs to limit competition in the market for a particular product.
A monopoly position is desirable for every entrepreneur or enterprise. It allows them to avoid a number of problems and risks associated with competition, to take a privileged position in the market, concentrating certain economic power in their hands, they have the opportunity to influence other market participants from a position of strength, to impose their conditions on them. We can assume that they impose their personal interests on their counterparties, and sometimes on society.
In Russia, the history of the emergence and development of monopolies has its own characteristics.
The first monopolies were formed in the 80s of the 19th century (the Union of Rail Manufacturers, etc.). The peculiarity of development was the direct intervention of state bodies in the creation and operation of monopolies in industries that met the needs of the state economy, or were of particular importance in its system (metallurgy, transport, engineering, oil and sugar industries). This led to the early emergence of state-monopoly tendencies. In the 80-90s there were at least 50 different unions and agreements in industry and water transport. Monopolistic concentration also occurred in banking. Foreign capital had an accelerating effect on the process of monopolization. Until the beginning of the 20th century, the role of monopolies in the economy was not great. The economic crisis of 1900-03 had a decisive influence on their development. Monopolies gradually covered the most important branches of industry and most often formed in the form of cartels and syndicates, in which sales were monopolized while their participants retained industrial and financial independence. The absence of legislative and administrative norms regulating the procedure for registration and operation of monopolies made possible use against them by the state legislation formally prohibiting the activities of monopolies. This led to the spread of officially unregistered monopolies, some of which, however, operated with the consent and direct support of the government (military-industrial monopolies). The illegal position created inconvenience (restriction of commercial and legal activities) and therefore they sought legalization using the permitted forms of industrial associations. Many large syndicates - "Produgol", "Prodvagon", "Roof", "Copper", "Wire", ROST, etc. - were joint-stock enterprises in form, the actual goals and activities of which were determined by special tacit counterparty agreements. Quite often the same enterprises participated simultaneously in several agreements. During the period of industrial upsurge (1910-14) there was a further growth of monopolies. The number of commercial and industrial cartels and syndicates amounted to 150-200. Many have turned into banking monopolies. largest banks, whose penetration into industry, along with the processes of concentration and combination of production, contributed to the strengthening and development of trusts, concerns, etc. (Russian Oil General Corporation, "Triangle", "Kolomna-Sormovo", "Rossud-Noval", the military-industrial group of the Russian-Asian Bank, etc.). The level of concentration of sales and production of monopolies was very uneven. In some sectors of the national economy (metallurgy, transport, engineering, oil and coal mining, sugar production), monopolies concentrated the bulk of production and sales and almost completely dominated the market, in others (metalworking, light and food industries) - the level of monopolization was low.
During the First World War 1914-18. the activity of a number of local monopolies ceased, but on the whole the war increased the number of monopolies and their power. The largest concerns of Vtorov, Putilov-Stakheev, Batolin arose. Especially developed monopolies associated with military production. Russian monopoly capitalism existed on the basis of the coalescence of monopolies with state bodies (metallurgical plant, Jute syndicate, etc.), as well as in the form of "compulsory associations" on the initiative and with the participation of the government (the Vankov and Ipatiev organizations, the Kiev organization for the production of barbed wire, etc.). ). Monopolies were liquidated as a result of the October Revolution during the nationalization of industry and banks. The Soviet state partially used the accounting and distributive bodies of the monopolies in the creation of economic management bodies. During Russia's transition to the market, monopolies and problems associated with them reappeared.
1.2 The concept of natural monopoly
Exist different types monopolies that depend on the market structure and form of competition. I would like to draw attention to the natural monopoly.
"Natural monopoly is a state of a commodity market in which the satisfaction of demand in this market is more efficient in the absence of competition due to the technological features of production, and the goods produced by subjects of natural monopoly cannot be replaced in consumption by other goods, and therefore the demand for this commodity market for goods produced by subjects of natural monopolies, to a lesser extent depends on changes in the price of this product than the demand for other types of goods.
A natural monopoly exists when its economies of scale are so large that one economic entity can supply the entire market at a lower cost than a number of competing economic entities would have. Large enterprises have better technical equipment and greater capacity, due to which there is an increase in labor productivity and a decrease in unit costs, which means more efficient use of resources. In this regard, a natural monopoly becomes a desirable phenomenon for society, although the monopoly nature still forces them to regulate their activities.
Another feature of natural monopolies is the existence of very high barriers to entry into the industry. Having a single producer with too large economies of scale determines the amount of capital needed to enter the industry. Society most often simply cannot withstand a second such producer (fixed costs are significant). For these types of activities, the size of an efficient enterprise, as a rule, is equal to or as close as possible to 100% of the volume of domestic consumption of these goods, which corresponds to just one efficient producer in the industry.
An example of a natural monopoly can be water supply, telephone communications, mail within a particular region. It should be noted that in such industries, economies of scale are especially pronounced, and at the same time, competition is not feasible. Let us try to explain why competition is unacceptable in natural monopolies. It is obvious that it is unprofitable for society to have several firms supplying domestic and industrial facilities within the same region with electricity or water, since operations on the above types of products require significant fixed costs for generators, pumping and treatment equipment, water pipes and high-voltage transmission lines. . Such costs are simply beyond the power of a single firm operating in the industry, even if such a firm can afford to incur costs of this magnitude, they will still not be covered by income from production, since the presence of several suppliers of water or electricity divides the entire industry into spheres of influence of individual firms and thereby limits the equity participation of each firm. In such conditions, an individual firm does not fully utilize its permanent equipment, as a result of which the cost per unit of production, and hence the tariffs for electricity and water, become unreasonably high. For clarity, imagine a situation where there are several firms in the industry, and all of them are in the same position. At the same time, there is fierce competition between individual firms both in the sphere of acquiring the means of production and in the sphere of marketing. As a result of competition between individual firms, weak firms become bankrupt, stronger ones (in order to withstand further competition) merge, forming a pure monopoly. As a pure monopoly develops, it can quickly make up for past losses and take advantage of its new monopoly position in the market by charging exorbitant prices for its goods and services. In principle, a pure monopoly can exist and develop successfully without causing any harm to the industry. An example of such monopolies may be monopolies in the automotive industry or in the production of household goods. However, in an industry that is extremely necessary for the population of the region, a pure monopoly is not only ineffective, but also detrimental. Therefore, in order to prevent the formation of a pure monopoly in industries such as water or electricity, the government usually grants an exclusive privilege to one firm to supply, for example, water or natural gas.
A firm that can supply all of the market demand for a good at a lower average cost than would be possible if two or more firms supplied exactly the same amount of a good is called a natural monopoly. The cost savings resulting from large-scale production (with increasing economies of scale) is the reason why these firms are often granted monopoly rights. Changes in technology can change cost conditions. For example, far telephone communications was once considered a natural monopoly, but is no longer seen as such due to changes in technology. Satellite communication systems and other technological innovations allow a number of firms to compete in the long-distance industry as well, and the larger seller no longer has the advantage of lower average production costs.
For example, the marginal revenue earned by increasing output from one unit to two is $10. This is marked by the G point on the MR curve. The MR curve originates at the same point on the vertical axis as the demand curve. The marginal revenue from the first unit of output is always equal to the price of that unit, because in this situation there is no "initial output" that generates less revenue as a result of the price reduction needed to increase demand. However, after the first unit is sold, the MR becomes lower than the price.
To maximize its profit, the monopolist follows the same kind of two-step procedure as a perfectly competitive firm. In the first step, both types of firms calculate the optimal positive output that maximizes profits, assuming that the firm produces anything at all. If a perfect competitor uses the market price in these calculations, then the monopolist uses marginal revenue. In the second step, firms of both types decide whether to produce this positive output or to stop production and produce nothing.
Figure 2. shows the demand curve D and the marginal revenue curve MR - the same as in Figure 1. The firm's marginal cost curve (MC) is also shown. For a monopolist, as for any firm, MC shows the amount of increase in the total costs of the firm in the case when it increases output by one unit.
When a monopolist increases output by one unit, the increase in revenue equals marginal revenue. The increase in costs is equal to the marginal cost. If marginal revenue exceeds marginal cost, then total revenue increases more than marginal cost, and hence profit increases. But if the last unit of output increases costs by more than the increase in income, then output should be reduced. Thus, if a firm produces anything at all, it maximizes its profits by producing a level of output at which marginal revenue equals marginal cost.
With optimal positive volume for a monopoly to maximize profits as long as the firm does not stop production, marginal revenue must equal marginal cost (MR=MC).
If the monopolist decides to produce something, he will set the price so that the quantity demanded is equal to his optimal positive quantity of output. Since marginal cost is equal to marginal revenue at optimal positive output, and marginal revenue is lower than price, it follows that this price will be higher than marginal cost. Thus, if the monopolist decides to produce something, he maximizes profit by raising the price above marginal cost.
As in perfect competition, the only difference in calculating the optimal positive output for the short run and the long run is that the latter includes long run marginal cost. In the short run, a monopolist, like a perfect competitor, continues to produce as long as it recovers its variable costs. Whereas in the long run, all total costs, both fixed and temporary, must be reimbursed. Table 1 summarizes the rules of conduct for a monopolist to maximize profits.
Table 1 - Decision of the monopolist on the optimal volume of supply.
There are two differences between this table and the case of perfect competition. The first is that in the limit condition, which is used to calculate the value of the optimal positive output. Price is replaced by marginal revenue. The second difference is that in the profit test, the monopolist uses the price at which the volume of demand equals the optimal positive volume of output, while the perfect competitor uses the existing market price, which he cannot influence.
Perfect competitors can be characterized as price takers, because they understand the market price as given and not beyond their control. Monopolists can be characterized as price producers because they take the market curve D as given and choose both the price and the quantity of output themselves. Since there is no relationship between the monopolist's price and output, there is no supply curve for the monopolist.
Thus, it cannot be said that the monopoly price and monopoly output are determined by the ratio of supply and demand. But under monopoly, as well as under perfect competition, price and output are determined by the conditions of demand and the conditions of cost formation. Marginal cost is a key cost element in both cases.
On fig. 2. shows the curve of the actual short-term average total costs "N" ATC, usually having a U - shaped. With an optimal, positive output Q*, the average total cost “N” is the value of ATC*. The firm's profit per unit of output will be equal to the price P* minus costs, or the average unit costs of ATC*. Therefore, in this case, "N" will cover its costs and choose the volume of production Q*. Indeed, the total amount of its profit is equal to the shaded area: the amount of profit per unit of output (P * - ATC *) multiplied by the total output (Q *).
Thus, the features of a natural monopoly are:
A firm that can supply all of the market demand for a good at a lower average cost than would be possible if two or more firms supplied exactly the same amount of a good is called a natural monopoly.
Goods produced by subjects of natural monopoly cannot be replaced in consumption by other goods.
The subject of a natural monopoly is an economic entity (legal entity) engaged in the production (sale) of goods under the conditions of a natural monopoly.
The existence of very high barriers to entry into the industry.
1.3 Legal support of natural monopolies
The purpose of state-legal regulation of natural monopolies is to maintain or establish a balance between the interests of consumers and the interests of subjects of natural monopolies, to streamline their activities by introducing rules of conduct. The laws regulating the activities of natural monopolies can be conditionally classified into the following groups:
Laws regulating directly natural monopolies and the conditions of their activity in the market: Federal Law of August 17, 2006 No. 147-FZ “On Natural Monopolies”
Industry laws. Federal Law No. 69-FZ of March 31, 2004 “On Gas Supply in the Russian Federation”, Federal Law No. 17-FZ of January 10, 2003 “On Railway Transport in the Russian Federation”, Federal Law “On Electric Power Industry” ( dated November 23, 2009) N 261-FZ, Federal Law of April 14, 1995 No. 41-FZ "On State Regulation of Tariffs for Electricity and Heat in the Russian Federation", Federal Law of October 26, 2002 N 127-FZ (as amended on December 31, 2007) "On Insolvency (Bankruptcy)".
Laws governing various aspects of the economic field. These laws include Civil Code(for example, paragraph 6 regulates relations arising in the process of electricity turnover), the Code of Administrative Offenses of the Russian Federation (Article 19.8 defines sanctions for failure to provide information, statutory, to the antimonopoly body, to the body regulating natural monopolies).
The Federal Law "On Natural Monopolies" defines the legal framework for federal policy in the field of natural monopolies and is aimed at balancing the interests of consumers and subjects of natural monopolies, ensuring the effective functioning of subjects of natural monopolies and the availability of goods sold for consumers.
The regulatory bodies of natural monopolies have the right to:
make decisions binding on subjects of natural monopolies on the introduction, amendment or termination of regulation, on the application of the methods of regulation provided for by this Federal Law, including on setting prices (tariffs);
take decisions, within its competence, on facts of violation of this Federal Law;
send binding instructions to subjects of natural monopolies to stop violations of this Federal Law, including the elimination of their consequences, to conclude contracts with consumers subject to compulsory service, to amend the concluded contracts, to transfer to federal budget profit received by them as a result of actions violating this Federal Law;
make decisions on inclusion in the register of subjects of natural monopolies or on exclusion from it;
send binding orders to executive authorities and local self-government bodies to cancel or change acts adopted by them that do not comply with this Federal Law, and (or) to stop violations of this Federal Law;
make decisions on imposing a fine on the subject of natural monopoly;
bring to administrative responsibility in the form of a warning or a fine the heads of subjects of natural monopolies, officials of executive authorities and local governments in cases provided for by this Federal Law;
apply to the court with a claim, as well as participate in the consideration in court of cases related to the application or violation of this Federal Law;
exercise other powers established by federal laws. Federal Law No. 147-FZ of August 17, 2006 "On Natural Monopolies
Grounds for decision-making by regulatory bodies of natural monopolies on the application of regulation methods:
The natural monopoly regulatory body decides on the application of the regulatory methods provided for by this Federal Law and other federal laws in relation to a specific natural monopoly entity based on an analysis of its activities, taking into account their stimulating role in improving the quality of manufactured (sold) goods and in meeting demand for them . At the same time, the reasonableness of costs is assessed and the following are taken into account:
- the costs of production (sale) of goods, including wages, the cost of raw materials and materials, overhead costs;
– taxes and other payments;
- the cost of fixed production assets, the need for investments necessary for their reproduction, and depreciation;
- forecasted profit from the possible sale of goods at different prices (tariffs);
– remoteness of various groups of consumers from the place of production of goods;
- compliance of the quality of manufactured (sold) goods with consumer demand;
– state subsidies and other measures of state support Federal Law of August 17, 2006 No. 147 "On Natural Monopolies"
When deciding on the application of methods for regulating the activities of a particular natural monopoly entity, the natural monopoly regulatory body is obliged to consider information provided by interested parties on the activities of this natural monopoly entity.
The regulatory bodies of natural monopolies independently decide on the inclusion / exclusion of subjects of natural monopolies from their register. If an economic entity is defined as a monopolist and included in the register, then state-legal regulation will be applied to it, which method should be specifically chosen with respect to one or another monopolist is determined by the natural monopoly regulatory body.
The Federal Law of August 17, 2006 No. 147 "On Natural Monopolies" establishes that the following methods of regulating the activities of subjects of natural monopolies can be applied by the regulatory bodies of natural monopolies:
) price regulation, carried out by determining (establishing) prices (tariffs) or their maximum level;
) determination of consumers subject to mandatory service, and (or) establishment of a minimum level of their provision in case of impossibility of satisfaction in in full needs for a product produced (sold) by a natural monopoly subject, taking into account the need to protect the rights and legitimate interests of citizens, ensure the security of the state, protect nature and cultural values.
2. Antimonopoly regulation in Russia
.1 Natural monopolies in Russia
Russia has not escaped the negative impact of industries - natural monopolies in market conditions. In the Russian industry at the moment there are four thousand enterprises - monopolists and their products account for 7% of the total. Of these, natural monopolies - 500.
Natural monopolies in Russia exist in various sectors: the electric power industry, the gas industry, and the oil industry.
“The electric power industry is a component of the energy sector, which ensures the electrification of the country's economy on the basis of rational production and distribution of electricity. It has a very important advantage over other types of energy - the relative ease of transmission over long distances, distribution between consumers, conversion into other types of energy (mechanical, chemical, thermal, light). Her main feature is that the products produced have no property to be accumulated for another use. It follows from this that the consumption of electricity coincides with its production, both in time and in quantity (taking into account losses).
Power industry features:
– The importance of energy supply for the population.
- Large capital intensity of the development of the electric power industry.
– High level of danger to the population and the environment.
The electric power industry is the main branch of any economy. It keeps the industry running Agriculture, transport, utilities. The level of socio-economic development of the country directly depends on it. In the electric power industry of Russia, a natural monopoly has developed historically. There is simply no place for competition in this industry, since this would mean the construction of expensive networks that perform the same functions and tasks, but belong to different entities. In this case, huge costs for the construction of these networks are inevitable.
The electric power industry is one of the fastest growing sectors of the economy in Russia. At present, the main consumer of electricity is industry, or rather, mechanical engineering, metallurgy, chemical and timber industries.
Rapid growth rates and a high level of centralization are one of the main features of the electric power industry.
Partial privatization of enterprises and the transition to joint-stock companies in the Russian power industry began in 1992. But before this happened, a preliminary restructuring of the industry was carried out. There was a problem of maintaining the efficiency of the industry. A quick solution to this problem was the creation of a holding company that controls the entire electricity industry - the Russian Joint Stock Company (RAO) for Energy and Electrification "UES of Russia".
UES is a single object of power plants management. The management of the UES comes from one center, which is equipped with the necessary electronic computers.
OAO RAO "UES of Russia" - Russian company power industry, which existed before July 1, 2008, is a vivid example of a natural monopoly. Full name - Open Joint-Stock Company Energy and Electrification "Unified Energy System of Russia". This is a complex complex of power plants, which is combined general regime work with one dispatch control center (CS).
The UES structure carries out management at three levels: inter-regional, inter-regional and regional. This allows you to quickly eliminate the accident without much damage to the UES and local consumers. The central point is in Moscow. It controls the operation of all stations that are connected to it.
The main goal of the formation of RAO "UES of Russia" is the formation of a wholesale electricity market. After the merger, the company received about 50 new power plants. The company is a monopolist in the electric power industry. It controls 77.7% of the total capacity of the country's power plants. RAO "UES of Russia" owns all the power transmission networks of the country.
In 1991, differentiated tariffs were introduced for paying for electricity by consumers in certain regions, depending on the costs of each energy system. This has resulted in the more efficient plants remaining underloaded, and vice versa, the less efficient ones belonging to the regional energy systems suffer from overloads.
The goal of the reform of the Russian electric power industry: "the entry of private owners into the competitive sectors of the electric power industry and the exercise of state control over the natural monopoly infrastructure." Preparations for the reform began in 2000.
The reorganization of OAO RAO "UES of Russia" was carried out in two stages. The first stage ended on September 3, 2007. The second phase ended on July 1, 2008. It was then that RAO "UES of Russia" ceased to exist as a legal entity.
The Russian energy system is considered one of the most reliable in the world.
The gas industry is one of the parts of the fuel and energy complex, the fuel industry. Unlike oil, gas does not need to be pre-processed for use, but must be sent immediately to the consumer.
Based on socio-economic aspects, the main areas of natural gas use are:
– Utility and household needs (heating, hot water, cooking);
– State needs (defense, reserves);
– Provision of other needs (production of mineral fertilizers, raw materials for gas chemistry).
Gas is used in such industries as: electric power, chemistry, metallurgy, construction, printing. But the most significant consumer of gas in Russia is the electricity sector. Over the past few years, this sector has seen a reorientation of most of the production of heat and electricity to the use of gas. The total volume of consumption is 40.5%.
The gas industry is a branch of natural monopoly, which is characterized, first of all, by the concentration of unique reserves in a small number of nearby fields. Under such conditions, it is difficult for a competitive market to emerge.
The gas industry is an industry that has practically not changed its production volumes in our country over the past few years. With an increase in demand, the potential for increasing production volumes remains not only within the country, but also abroad.
A constant supply of gas makes it possible to provide heat and electricity to the population in almost all regions of the country.
The following goals are identified gas industry:
– Stable and efficient satisfaction of gas demand;
– Development of the Unified Gas Supply System (UGSS);
– Improving the gas industry to improve economic performance;
– Ensuring constant income in the state budget;
– Stimulation of demand for products of related industries;
– Ensuring foreign political relations.
The restructuring of the gas industry in Russia has not led to major changes, unlike the electricity industry.
In 1989, the Ministry of Gas Industry of the USSR was transformed into the State Gas Concern "Gazprom". On November 5, 1992, the Decree of the President of the Russian Federation "On the transformation of the GGK Gazprom" into the Russian Joint Stock Company "Gazprom" was signed. RAO Gazprom supported and contributed to the development of many domestic industrial enterprises. He guaranteed orders for the supply of material and technical resources, and also invested heavily in the creation of new equipment and technology. Gazprom conducts cooperation with enterprises, taking into account, first of all, the social and economic interests of the society of a particular region as a whole. RAO Gazprom has entered into cooperation agreements with 31 regions and subjects of the Russian Federation. Issues related to the liquidation of consumer debts for supplied gas, the provision of payments, as well as social and economic tasks- introduction of new technologies, preservation of jobs. The role of RAO Gazprom in Russia is great. It provides about 8% of Russia's GDP, provides a quarter of all tax revenues to the budget.
In 1999 RAO "Gazprom" was transformed into OAO "Gazprom". It accounts for about 25% of federal budget revenues. Gazprom is one of the largest creditors in Russia. He owns about 30% of the European gas market. It includes 8 gas production associations and 13 regional gas transmission companies.
Gazprom occupies one of the most stable positions in the world market. This is due to the unique resource base and developed system gas pipelines.
Gazprom is an example of a natural monopoly in Russia, it is the largest exporter. The creation of a competitive gas market in Russia is practically impossible at present. This can only happen if all deposits in the north Western Siberia will be exhausted. Then less profitable deposits will become more in demand.
Russia has 35-40% of the world's natural gas reserves, which is more than 48 trillion cubic meters. cube m of proven gas reserves in the world.
Forecasts for further volumes of gas production in Russia directly depend on the socio-economic development of the country. There are three development paths:
Favorable development scenario: gas production in Russia may amount to 645-665 billion cubic meters. m in 2010 and 710-730 billion cubic meters. m in 2020.
Moderate development option: 635 bcm m in 2010 and 680 billion cubic meters. m in 2020.
Critical development option: total 555-560 billion cubic meters. m in 2010 and 610 billion cubic meters. m in 2020.
In addition to such industries as the electric power industry and the gas industry, natural monopolies also exist in the oil industry.
"Oil is a combustible, oily liquid, common in the sedimentary shell of the Earth, the most important mineral."
The oil industry is an integral part of the fuel and energy complex, which includes the extraction and production of fuel, the production of heat and electricity, the distribution and transportation of energy and fuel. It is closely connected with all sectors of the economy, therefore it plays a big role for the Russian economy. Oil is the most valuable and important raw material for the chemical industry, as it is necessary for the production of synthetic rubber, synthetic fibers, plastics, polyethylene, proteins, and detergents. Products of the oil industry are used in mechanical engineering: adhesives, parts for plastics, oils. Residues from the processing of oil waste are used in metallurgy for the smelting of aluminum and steel. Petroleum products are also used in the pharmaceutical, perfume and medicine industries.
“The oil industry is a branch of heavy industry, including exploration of oil and oil and gas fields, drilling of wells, production of oil and associated gas, pipeline transportation of oil. The purpose of oil exploration is to identify, geological and economic assessment and preparation for the work of industrial deposits, it is carried out with the help of geological, geophysical, geochemical and drilling operations.
All deposits are divided into the following groups:
Explored in detail;
previously explored;
Weakly explored;
Borders are not defined.
Currently, exploration of deposits is partially suspended, as there are not enough funds to conduct intensive work. But there are other problems of the oil industry, such as: irrational use of existing fields, large losses of oil during production and transportation, aging technologies, etc.
In the present, the oil industry in Russia can be characterized by a reduction in the growth of industrial reserves, a decrease in quality and pace, a decrease in drilling volumes, an increase in the number of idle wells, the absence of large fields, a progressive backwardness of the industry, insufficient social development and environmental issues.
The main consumer of oil is refineries, since oil is not used in its pure form. Such plants are located in all areas, since it is much more profitable to transport oil in its pure form than its refined products.
The main feature of the domestic oil market is relatively low prices. This leads, first of all, to the low cost of business of the country's oil companies in comparison with foreign counterparts. Until 1992, crude oil prices were set by the government for all companies. But in 1992, they decided to replace direct control over the industry with indirect regulation. This corresponded to a sharp jump in energy prices. To protect the population from the surge, the government introduced several mechanisms that limited exports and the overall profitability of oil companies. The domestic market is also affected by the “state oil supply system”: companies must sell certain volumes of oil to the state at fixed prices.
In Soviet times, the oil industry was managed by three departments:
Ministry of Petroleum Industry (MNP);
Ministry of Construction for the Oil and Gas Industry (MNGS);
Ministry of Geology.
In November 1991, the state oil concern LangepasUraiKogalymneft (LUKOIL) was established by Decree No. 18 of the Council of Ministers of the USSR. The new concern united three enterprises: Langepasneftegaz, Urayneftegaz, Kogalymneftegaz and Permnefteorgsintez refineries, Volgograd and Novoufimsk oil refineries.
In 1993, the state concern became an open joint-stock company "Oil Company" Lukoil "". In 2004, Lukoil finally became a private company, the shares remaining from the state were sold to an American company.
Lukoil owns oil refineries with a total capacity of 58 million tons of oil per year. In addition, the company includes Korobkovsky, Usinsky, Perm and Lokosovsky gas processing plants.
Oil is transported with the help of Transneft, rail and water transport.
Forecasts for further volumes of oil production in 2010-2030 provide for a stable increase in oil refining at Russian refineries and the consumption of petroleum products in the domestic market (see "Forecast balance of supply and demand ...").
Figure 3. Forecast balance of oil supply and demand until 2030, million tons
In 2030, the volume of crude oil refining should reach almost 300 million tons. Consumption in the domestic market of diesel fuel will grow at a faster pace. Net export of oil from Russia, according to the basic version of the Concept, in 2010-2020 will grow at a low rate (less than 0.6% per year on average) and should reach its maximum
level in 2020. In the commodity structure of exports, a significant increase in the role of diesel fuel is expected against the background of a decrease in the share of fuel oil.
At the same time, in order to achieve the strategic goals of the development of the oil complex, according to the Concept, it is necessary to solve a number of basic tasks:
– Ensuring expanded reproduction of oil reserves through geological exploration and timely preparation of fields for operation in both mature and new oil production areas;
– Improvement of oil production technologies, including the introduction of modern methods of enhanced oil recovery to increase the oil recovery factor;
- Development transport infrastructure to improve efficiency, diversify the structure and directions of liquid hydrocarbon supplies;
– Development of oil refining, aimed at increasing the depth of oil refining and improving the quality of produced oil products;
– Resource saving, reduction of losses at all stages of the technological process in the preparation of reserves, production, transportation and refining of oil.
In accordance with the needs of the domestic and foreign markets, a set of indicators was built strategic development oil complex, which determine the parameters for the development of the mineral resource base, oil production, oil refining, oil pipeline and oil product pipeline transport. By 2030, the following parameters are expected to be achieved:
– increase in oil recovery factor (ORF) up to 35-37%;
– share growth Eastern Siberia and the Far East in the all-Russian oil production up to 18-19%;
– an increase in the capacity of main pipelines for oil supplies to countries
– 6far abroad by 65-70%;
– increase in the depth of oil refining up to 89-90%;
– increase in the yield of light oil products up to 72-73%.
– Terminal in the port of Vysotsk ( The Gulf of Finland Baltic Sea) with a capacity of about 11 million tons of oil and oil products per year.
– A terminal near the village of Varandey (Barents Sea) with a capacity of 1.5 million tons of oil per year.
– Terminal in the port of Svetly on the Baltic Sea with a capacity of 6 million tons of oil and oil products.
– Astrakhan terminal in the village of Ilyinka (Astrakhan region) with a capacity of 2 million tons of oil and oil products per year.”
In the future, it is planned to reduce the consumption of oil as an energy raw material and increase the consumption of nuclear, solar and other types of energy, especially in the chemical industry and many sectors of the economy.
However, in terms of oil reserves, LUKoil is still inferior to another largest oil company- Rosneft. In 1991, the state oil company Rosneftegaz was created on the basis of the disbanded Ministry of the Oil and Gas Industry of the USSR. In 1993 it was transformed into state enterprise Rosneft. In 1995, Rosneft was incorporated.
By 2008, the idea arose to unite major oil companies to create a single oil concern that would become the leader of the global oil industry. The formation of a state oil company on the basis of Rosneftegaz was conceived back in 2001. The state wanted to merge Rosneft and Gazprom. Rosneft, Surgutneftegaz, Zarubezhneft and RussNeft were supposed to merge on the basis of Rosneft. As a result of the merger, a leader in the global oil industry could be formed.
With the general decline in production in Russia, the demand for products and services of industries - natural monopolies, with the exception of communications industries, has been constantly declining. These industries are extremely capital-intensive, a significant part of their costs is fixed. As a result, the share of fixed costs in the price of a unit of production grew. In addition, until recently, natural monopoly entities financed investments to a large extent from internal sources (investment and stabilization funds formed at the expense of cost and profit), which caused an excessive burden on tariffs.
The rapid and significant rise in prices in the electric power industry, the gas industry, the communications industries and the railway transport made it necessary to raise the question of the reasonableness of costs (wage costs, social payments, investment activities) and the compliance of the quality of the products and services offered with the price level.
But for all the obvious criticality of the situation, the problem of the need for state regulation of natural monopolies was recognized by the authorities only by 1994, when the rise in prices for their products had already had a significant impact on undermining the economy. At the same time, the reformist wing of the government began to pay more attention to the problems of regulating natural monopolies, not so much in connection with the need to stop price increases in the relevant industries or ensure the use of the possibilities of the price mechanism for macroeconomic policy, but first of all, trying to limit the range of regulated prices.
All these negative aspects of monopoly in the economy force modern states to develop and implement antimonopoly policy - a set of measures of state power aimed at preventing, restricting and suppressing monopolistic activities, providing all economic entities with equal conditions for competition and preventing unfair competition.
2.2 Methods of antimonopoly policy in Russia
The state antimonopoly regulation of the economy includes two interconnected areas:
Development and adoption of special antimonopoly legislation;
Formation of a system of bodies that carry out antimonopoly regulation and control compliance with antimonopoly legislation.
In a situation of strong monopolization of the economy, the state is forced to exercise control over the activities of natural monopolies. Industries of natural monopoly have high economic efficiency, which is the main reason for the need to regulate their activities.
State control consists in the possession of a controlling stake and in special antimonopoly legislation that determines the methods of regulation and control of natural monopoly industries, consumers subject to preferential or mandatory services.
State regulation is applied, first of all, in public use sectors: in communications, gas, electricity, water supply. Enterprises are subject to regulation in which:
– Most of their business consists of services designed for a wide range of consumers;
– Financing comes with huge sums of money;
– Business development affects the improvement of public welfare and the development of industry in a particular area.
There are three ways to regulate natural monopolies:
1. Direct state regulation.
The essence of such regulation is determined, as a rule, by special legislative acts. For example, the Federal Law "On Natural Monopolies" dated August 17, 2006. It defines the industries that are classified as natural monopolies and the provisions for their regulation.
There are several problems with such regulation. First, there is a need to create a body of state control over the activities of a natural monopoly. In this case, there is a risk that not taken into account public interest and, above all, the interests of the ruling groups. Secondly, it is difficult to accurately determine the production costs of the producer of goods in natural monopoly industries. And this is a necessary part of the regulation.
2. Bidding for usability and effectiveness in different conditions.
This method of regulation of natural monopoly is associated with the use of the mechanism economic organization. These are bidding for a franchise, that is, bidding for the right to conduct such activities. In this case, the shortcomings are manifested not in the economic, but in the administrative system. With this method of regulation, a contract is concluded with a manufacturer that offers the best conditions.
3. Price discrimination.
This method is used both by the natural monopolies themselves in order to increase their net income, and by the entities that regulate them in order to reduce the negative effect of the activities of the monopolies. This is the sale of goods at different prices to different buyers. The main condition for price discrimination is the impossibility of reselling the good. Price discrimination is divided into three categories depending on the method of implementation:
1. First degree.
It is the sale of each unit of a good at its demand price. In this case, the monopolist's demand curve becomes a marginal revenue curve. Discrimination of this degree is extremely rare.
2. Second degree.
The monopolist does not sell every unit of the good, but certain lots of it at different prices.
3. Third degree.
Only if the industry demand appears in the form of separate groups of consumers with different demand functions.
Natural monopolies very often use price discrimination in their regulation.
According to the Law "On Natural Monopolies", there are two methods for regulating natural monopolies:
1. Price regulation.
Its essence is to determine and establish fixed prices for goods and services, or their marginal level, or marginal coefficients for changing prices for goods of natural monopoly industries. This procedure is fixed by special regulations.
There are several methods of price regulation:
– Marginal cost method.
- The state controls that the price set by the monopolist is equal to the marginal cost. This ensures efficient production and consumption of products.
– Method of average costs.
- The price should be equal to the average cost. With this method, goods can be produced less than should be for an efficient economy as a whole. On the other hand, the monopolist knows in advance that all his expenses will be compensated, that is, there is no need to minimize costs.
– Price ceiling method.
– This method usually leads to a shortage of products.
– Subsidizing natural monopolies.
This is a method of price discrimination, when some consumers receive products at lower prices at the expense of others who pay more.
It turns out that industrial enterprises subsidize tariffs for the population.
2. Non-price regulation.
The bottom line is to identify consumers who need service, establish the level of their provision, taking into account the need to protect the rights and interests of citizens, ensure the security of the state, protect nature and cultural values. The resources that are needed in the production of any product are limited, and sometimes completely exhausted. This allows you to selectively sell products to different consumers. The state intervenes to protect the interests of all consumers.
Which method to use in the regulation is determined by the regulatory body of natural monopolies. This decision is made after careful analysis of the particular regulated entity.
To public policy in the areas of activity of subjects of natural monopolies was the most effective, state control is needed:
1. Preliminary control.
This is a mandatory submission of an application for consent to any transactions, as well as the submission of another necessary information to the relevant authorities.
2. Follow-up control.
This is a mandatory notification of the natural monopoly regulator about the actions performed on the subject of the monopoly.
Subjects of natural monopolies are in a special position. Hence, it became necessary to restrict their economic activity. Subjects of natural monopolies do not have the right to refuse to conclude contracts with individual consumers for the production of goods, if they have the ability to produce such goods. Subjects of natural monopolies are obliged to provide access to the markets for goods and services, to produce goods and services regulated by the Law "On Natural Monopolies". They are also required to submit reports on their work and draft investment plans.
2.3 Prospects for the development of Russia's accession to the WTO
natural monopoly commodity market
With all its large-scale potential, the modern Russian economy can effectively develop only with active interaction with the world market for goods and services. The market reforms being carried out in the country require the same. In turn, the rules of the game in the world market in the context of globalization are now determined by countries collectively, with the decisive role in this of the World Trade Organization (WTO), which unites about 150 states and covers over 95% of world trade turnover.
In a strategic perspective, Russia should join the WTO. Only this can be the final choice of Russian business as a whole. However, the rules and regulations of the WTO create a fundamentally new organizational and legal environment for its functioning, and this causes an ambiguous reaction in the country.
The purpose of Russia's accession to the WTO is to avoid virtual isolation in the world economic system. Obtaining better than existing and non-discriminatory conditions for the access of Russian products to foreign markets;
Access to an international trade dispute resolution mechanism;
Creating a more favorable climate for foreign investment as a result of bringing the legislative system in line with WTO rules;
Expanding opportunities for Russian investors in WTO member countries, in particular, in the banking sector;
Creation of conditions for improving the quality and competitiveness of domestic products as a result of an increase in the flow of foreign goods, services and investments to the Russian market;
Participation in the development of rules for international trade, taking into account their national interests;
Improving the image of Russia in the world as a full participant in international trade.
Benefits of Russia's accession to the WTO:
– Russia can gain access to new service markets.
- Russia will be able to influence the formation of international trade rules.
– Adaptation of our legislation to international standards is a positive factor for domestic business.
– Sectoral and regional lobbying for new laws will be weakened.
The costs of joining the WTO:
- Protecting many industries from foreign competition will be significantly more difficult.
- Budget revenues from import duties will decrease.
– The liberalization of tariffs will make it more attractive to import goods from abroad, the attractiveness of investment in production will decrease.
- Accession to the WTO does not guarantee against the use of anti-dumping measures against our goods.
Russia will become a full member of the World Trade Organization in the summer of 2012, thus completing a difficult journey that began in 1993, when it applied for membership in a club of 153 market economies. in Geneva working group on the admission of Russia to the WTO approved the final report and sent a recommendation for admission to the Council of Ministers. On December 15, 2011, the Council of Ministers made a positive decision on Russia's accession to the WTO. The document enters into force 30 days after ratification by Parliament, which is six months away.
The last obstacle to Russia's entry - Georgia's disagreement - was overcome with the mediation of Switzerland.
Russia, which is a huge market of more than 142 million consumers, will reduce customs duties on imports of cars, chemical products, sugar, wood, pulp and others. On average, duties will be reduced from 10% to 7.8%; for agricultural products - from 13.2% to 10.8%; duties on industrial products will be reduced from 9.5% to 7.3%. Maxim Medvedkov, head of the delegation at the talks on Russia's accession to the WTO, said that customs duties on imports, which increased during the crisis of 2008-2009, will return to the initial level, including new cars (from 30% to 25%). The reduction in customs duties will take place in stages over eight years, depending on the industry. The Russian enterprises exporting steel and chemical products will benefit the most from WTO accession.
The agro-industrial complex, on the contrary, fears competition. Russia has committed to halving subsidies to agriculture and livestock from $9 billion to $4.4 billion in 2018, but currently governmental support agriculture is 3.5 billion dollars. With regard to energy, producers and suppliers of natural gas will be guided by market principles, although the Russian authorities will continue to subsidize energy prices for domestic consumption, in accordance with the norms of their social policy.
Russia agreed to accept the terms of the Vienna Convention for the Protection of Intellectual Property Rights, including actions against Internet sites that illegally distribute copyrighted products. Foreign banks will be able to open their branches in Russia, while international insurance companies will have to wait nine years.
Repeatedly it seemed that the negotiation process was about to end, but each time the deadlines were shifted. In the summer of 2009, Vladimir Putin announced that Russia would like to join the WTO along with Kazakhstan and Belarus, its partners in the Customs Union and active supporters of economic integration in the post-Soviet space. Subsequently, Russia refused group accession to the WTO. According to Medvedkov, Russia will facilitate the accession of Kazakhstan, which is already in its final stages, and Belarus, which still has a long way to go.
Conclusion
In this work, I studied in detail the essence of natural monopolies, their emergence, activities, and signs. I also found out that natural monopolies are industries that need to be regulated. This is the problem with natural monopolies.
It should be noted that the main negative side of monopolization is the excessive power of monopoly firms. The circle of those who can do business is steadily narrowing and monopolizing the entire economy. It is difficult or almost impossible for new companies to enter the market, which destroys the very structure of entrepreneurship. Insufficient influx of new companies into the market does not allow healthy competition to develop, as a result of which companies have no incentive to improve labor efficiency. All this does not contribute to the development of the economy as a whole, and hinders the emergence and development of new competitive enterprises. The lack of an effective tax and legal system is also not conducive to business development. As a result, many companies operate in the short term, take money abroad, and are reluctant to invest it in production. All this negatively affects the economy of the country. "Personnel monopolism" also has an effect, when all key positions in business and the state are occupied by people who think in terms of the Soviet system, who do not have the skills to work in market conditions and do not want to create these conditions. All this exacerbates the problems faced by Russia on the threshold of the 21st century. In such conditions, only those enterprises that have a unique business or Western companies are able to survive. The monopoly has its positive sides, but they are very few. As for small or medium-sized businesses, despite the many measures and half-measures for its formation and development, to survive in modern conditions they practically can't. And it is on such a business that the economic growth of the country is built, and hence the growth of the welfare of the population, social stability in society. Russia has little choice: either a cautious movement, counting on the emergence of a middle class, or tough measures to remove the "shackles" from economically active subjects, creating real prerequisites for the rapid growth of our economy. "In such a situation, the role of corporations that decide the success of initiated reforms to restructure the economy, which are able to lead Russian economy on a sustainable growth trajectory.
At this stage, the problem of monopolization and unfair competition ceases to be purely economic - it becomes more and more political and social. Undoubtedly, in some cases the existence of a monopoly is justified and necessary, but these processes must be strictly controlled by the state to prevent abuse of its monopoly position.
Thus, state regulation of natural monopolies is one of the main factors ensuring the normal functioning of the economy. If the enterprise is not state-owned, then its regulation boils down to the following: either prices are set at the level of average monopoly costs, or two-component tariffs are applied.
The essence and meaning of any antimonopoly policy is to use the benefits of a large-scale economy and neutralize its possible negative consequences associated with the weakening of competition. It is the combination of these two approaches that constitutes practically the most intractable legal and economic task that varies depending on the situation.
Antimonopoly legislation should be reasonable and thoughtful, and its application by employees of regulatory agencies should be a regulatory mechanism for the market, but nothing more, since excessively rigid implementation of antimonopoly policy can lead to a large imbalance in established market relations and cause discontent among employees of large firms.
A decisive role in creating a favorable competitive environment in the market is played by antimonopoly legislation and the activities of antimonopoly authorities, the correct behavior of which contributes to the stabilization of the entire economy as a whole.
But here another problem arises, which is that the industry monopoly that has been established for decades cannot be quickly replaced by a free and self-organizing market, because the establishment of competitive relations is not a one-time instant action, but a long, complex process, and for a considerable number of enterprises it is disastrous. . Only those enterprises that provide higher quality goods, relatively lower prices and rapid turnover will be able to survive.
So, the antimonopoly policy of the state does not mean the total destruction of monopoly. It involves the preservation of certain types of monopolies, ensuring their state regulation.
Thus, in the field of creating a legislative and institutional framework for the regulation of natural monopolies, some important and necessary measures have been taken, but much remains to be done both in terms of building an effective regulatory system and in terms of restructuring industries, which will make it possible to form a more compact and manageable sphere. regulation.
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Monopoly (Greek monos - one, poleo - sell) - a large owner who captures the vast majority of the market space in order to enrich himself.
natural monopoly. It is owned by the owners and economic organizations which have at their disposal rare and non-reproducible elements of production (for example, rare metals, special land for vineyards). This also includes entire sectors of infrastructure that are of particular importance and strategic importance for the whole society (railway transport, the military-industrial complex, etc.). The existence of natural monopolies is justified by the fact that they give a huge economic gain from large scale production. Here, goods are created at a lower cost compared to the expenditure of resources that would be in many similar firms.
Rules of Conduct for Monopoly Firms
Monopoly associations themselves and at their own discretion set the market price for the products they sell. Under conditions of free competition, when determining the equilibrium price, the interaction of supply and demand (respectively, the demand curve and the supply curve) is taken into account. However, monopoly associations do not at all take into account the objectively necessary volume of production of goods. These organizations influence the volume of demand in their interests by setting a favorable price.
Professors Stanley Fischer, Rudiger Dornbusch and Richard Schmalenzi (USA) reveal the mechanism of monopolistic pricing in this way: “monopolists do not take the price as given. They can be characterized as price producers, because they take the market demand curve as given and choose both the price and the volume of output Since there is no relationship between the price of a monopolist and the level of output, there is no supply curve for a monopolist "
Here are the main features of a natural monopoly:
- 1) the legal basis for the establishment (consolidation), implementation and termination of the regime.
- 2) the correlation of the legislation on monopolies with the Law "On Competition", their differentiation in terms of the subject and means of legal regulation.
- 3) spheres (boundaries) of the considered monopoly regimes by industries and types of management, as well as relations to which the legislation on regulated monopolies applies.
- 4) general legal status subjects of monopolies, the specific nature of their rights and obligations both in the sphere of relations with third parties and in internal company processes.
- 5) a system for regulating the activities of monopoly entities.
The rules of behavior of monopoly firms depend on how they conduct their "price production".
First rule. Firms set monopolistically high prices for their products, exceeding the social cost or the possible equilibrium price. This is achieved by the fact that monopolists deliberately create a deficit zone, reducing production volumes and artificially creating increased consumer demand. This behavior can be seen on the graph (Fig. 1.1).
Rice. 1.1.
Suppose that in some industry, before the capture of its market by a monopoly (that is, under competitive conditions), the equilibrium price (LL) was formed at the level of the equilibrium point (P), where the demand curve (C1-C2) and the supply curve (P1-P2 ). At the same time, the equilibrium volume of output amounted to the value Kp. But then the monopoly, taking into account elastic demand, reduces the level of output to the value of KM. In the end, this allows you to set a monopolistically high price of the CM.
At each resumption of the procedure for raising prices, the monopoly, of course, takes into account the losses that it incurs from a decrease in the volume of production and sale of goods. To make up for this loss of income, it sets new prices for more high level. At the same time, the monopoly ensures that the proceeds from the sale of a smaller number of products cover the lost profit and give an increased amount of income.
Second rule. Monopsony sets monopolistically low prices for goods purchased from outsiders. Lowering the price in comparison with the social value or the possible equilibrium price is achieved by artificially creating a zone of excess production. In this case, the monopsony deliberately reduces the purchase of goods, due to which their supply exceeds the monopolistic demand. This is usually done by monopsony, which are engaged in the processing of agricultural products bought from a mass of small farms. You can visualize their behavior in Fig. 1.2.
Rice. 1.2.
Let us assume that in the industry processing agricultural raw materials, under competitive conditions, the equilibrium price (Ps) is set at the level of the equilibrium point (P) at the intersection of the demand curve (C1-C2) and the supply curve (P1-P2). Then the equilibrium quantity of sold raw materials is Kp. But when the monopsony reduces purchases of products from farmers to the level of Km, a monopolistically low price of Cm is set. This price gives the monopsony the desired benefit. Her winnings increase with each new decrease. purchase prices, which is the result of the deliberate creation of a zone of surplus of sold products. monopoly market price
Such an example is typical. The monopsony of Western countries has long been buying cheap raw materials from entrepreneurs and small commodity producers in Asia, Africa and Latin America. Low prices are set for a number of traditional African exports (tea, coffee, cocoa beans).
Third rule. A firm that is both a monopoly and a monopsony doubles the "tribute" it collects through what are called "price scissors." We are talking about monopoly high and monopoly low prices, the levels of which move away from each other like diverging scissor blades. Such a price movement is based on the expansion of zones of excess and shortage of goods. It is typical for many manufacturing enterprises, which, especially in conditions of inflation, raise prices for their finished products several times more than prices in the extractive industries.
Natural monopolies and their regulation Natural monopolies are an industry in which long-run average costs are minimal only if only one firm serves the entire market.
A natural monopoly may exist as a result of barriers to entry by competitors, government privileges, or information restrictions.
A natural monopoly is characterized by large increasing returns to scale, and production costs are much lower compared to perfect competition or an oligopoly.
A natural monopoly is based on features of technology that reflect the natural laws of nature, not on property rights or government licenses. The forced dispersal of production to a few firms is inefficient, since it would lead to an increase in production costs.
Areas of activity of natural monopolies:
Transportation of oil and oil products through main pipelines;
Transportation of gas through pipelines;
Services for the transmission of electrical and thermal energy;
Rail transportation;
Services of transport terminals, ports and airports;
Public electric and postal communication services.
In real practice, the application of price regulation for products of natural monopolies faces a number of problems. Considerable difficulty is the very definition of the level of average costs in terms of the validity of the inclusion of certain types of costs in the costs. Another problem is that price controls can increase X-inefficiencies.
2. Antimonopoly policy in relation to natural monopolies
2.1. Regulation of activities of natural monopolies
The high economic efficiency of natural monopolies makes it absolutely unacceptable to break them up. This, however, does not mean that the state can refrain from regulating natural monopolies. After all, their uncontrolled activity can bring significant harm.
As monopolists, these structures are trying to solve their problems primarily by raising tariffs and prices. The consequences of this for the country's economy are the most devastating. Production costs in other industries are rising, non-payments are growing, and interregional ties are paralyzed.
And this is not an abstract theory. The entire Russian business press of recent years is full of complaints from industrial enterprises about energy prices and so on.
At the same time, the natural nature of the monopoly position, although it creates opportunities for effective work does not guarantee that these possibilities will be implemented in practice. After all, there is a mechanism of X-inefficiency. Indeed, theoretically RAO "UES of Russia" could have lower costs than several competing electric power firms. But where are the guarantees that it wants to keep them at a minimum level.
At the floor, i.e. via Ramsey pricing: raise prices above marginal cost inversely with the elasticity of demand. This rule can be represented mathematically as follows:
Where P is the price of goods i;
MC is the marginal cost of producing good i;
E is the elasticity of demand for product i at its price;
K - constant (selected so that the break-even condition is met)
This rule can be formulated as follows: reduce the output of all products and services in an equal ratio until the total income equals the total costs.
The main way to combat the negative aspects of natural monopolies is to state control for the pricing of natural - monopoly goods or for the volume of their production (say, by determining the range of consumers subject to mandatory service).
2.1.1. X-inefficiency.
The main feature of the market behavior of monopolists is X-inefficiency. The matter is that at all other types of the market to support this indicator at a high level the firm willy-nilly is forced by competitors. If the firm does not, for example, reduce costs to the lowest possible level, its products will be more expensive than those of rivals, and they will no longer be bought.
In the case of a monopoly, this natural limiter disappears - the monopolist has no competitors. That is why monopoly firms tend to reduce the efficiency of resource use. All unnecessary expenses - from the wages of a lazy worker to the unbridled luxury of top management's offices - can easily be included in costs. And the buyer deprived of choice will be forced to pay them. In general, X-inefficiency is called mismanagement of a business, leading to an increase in costs.
2.2. Production level maximization
Price regulation of the activities of natural monopolies involves the forced fixing of the maximum value of prices for the monopolist's products. At the same time, the consequences of this regulatory measure directly depend on the specific level at which prices will be fixed.
Figure 1 shows a common variant of regulation, in which the highest allowable price is fixed at the level of intersection of marginal costs with the demand curve (P=MC=D).
The main consequence of setting a maximum price in terms of the behavior of the monopoly firm is a change in the marginal revenue curve. Since soon the monopolist cannot raise the price above the above level even at those volumes of production where the demand curve objectively allows it, his marginal revenue curve shifts from the position MR to the position MR, which coincides with the maximum allowable price value P. Indeed, if the maximum price of electricity is fixed at the level of 27 kopecks. per 1 kWh, then each additional kilowatt sold will generate income equal to this amount, and the marginal revenue curve will degenerate into a horizontal straight line passing at this level.
Then the rule MC=MP comes into force. Like any other firm, the monopolist itself, without any state coercion, will strive to bring the volume of production to Q, corresponding to the point of intersection of the marginal revenue and marginal cost curves. Figure 1 clearly shows other advantages of this method of limiting monopolistic prices: a significant increase in production (Q>Q) is achieved and prices are lowered (P
But the described method of regulation also has a drawback: the price level set by the state is in no way connected with average costs, i.e. he can, by the will of the state, secure both the receipt of economic profits (Fig. 1a) and the incurring of losses (Fig. 1b). Both options are undesirable. The presence of a natural monopolist of constant economic profits is tantamount to a tax on consumers. By paying inflated prices, they increase their costs with all the ensuing consequences. negative consequences(a decrease in demand for their products, a decrease in competitiveness, etc.). But fixing losses is even more dangerous. In the long term, a natural monopolist can cover them only through government subsidies, otherwise it will simply go bankrupt. And this opens a wide road to extravagance. Since soon there is no hope for profit anyway, and the state will cover the losses anyway, the monopolist can benefit only by squandering public funds. The highest salaries for managers, bloated staffs, huge hospitality expenses - all these are hidden forms of enrichment at the expense of the treasury. In other words, X-inefficiency in this case reaches the highest level.
2.3. Ensuring self-sufficiency
Another guideline for setting maximum prices may be the point of intersection of the average cost curve and the demand line (P=ATC=D). Since the average cost in this case is exactly equal selling price, the natural monopolist works in this case without losses and profits. Thus, the main problem of the previous method of regulation is removed.
On fig. Figure 2 shows that this approach to regulation also solves the problem of increasing production (Q>Q) and reducing prices (PMR). It is obvious that the monopolist, by hook or by crook, will strive to stop production at the level Q and not bring it to Q. Since the demand at the price P will be exactly Q, then there will be a shortage in the market (Q> Q).
Citizens of large Russian cities experienced something similar in the early 1990s. The Ministry of Railways stopped repairing electric trains, and there were fewer and fewer of them on the line every day. But all of them, as if by magic, disappeared as soon as ticket prices were raised.
Thus, the second approach to price regulation is also not ideal. In its purest form, it calls commodity deficits and therefore requires additional coercive measures in relation to monopolists. The most common of these measures in modern Russia is the compilation of lists of consumers whose supply the monopolist has no right to stop supplying.
2.4. Reforming the structure of Russian natural monopolies
In addition to price regulation, reforming the structure of natural monopolies can also bring certain benefits - especially in our country. The fact is that in Russia, within the framework of a single corporation, both the production of natural monopoly goods and the production of goods that are more efficient to produce under competitive conditions are often combined. This association is, as a rule, the nature of vertical integration. As a result, a giant monopoly is formed, representing a whole sphere of the national economy.
RAO "Gazprom", RAO "UES of Russia", the Ministry of Railways - these are the three whales of "monopoly in Russian", the clearest examples of such associations. RAO Gazprom, along with unified system Russia's gas supply includes exploration, mining, instrument-making enterprises, design and technological structures, and social facilities. The Ministry of Railways is in charge of both infrastructure - railways, stations, Information system, - and non-monopoly activities - contracting, construction and repair organizations, catering enterprises.
The essence of the reforms intensively discussed in our country is as follows: it is proposed to develop competition in those types of activities of natural monopolies where it can be achieved. That is, the competition of firms that provide preventive maintenance and repair of water supply and sewer systems in an apartment is probably the only way to protect the consumer from the arbitrariness of modern DEZ, REU, etc. Only if there is competition, residents will not have to wait weeks for a called master plumber.
Obviously, the division of the natural monopoly and potentially competitive sectors should not be forced and mechanistic. After all, not only competition, but also industrial integration has its potential to reduce costs. Even in countries with very strict antimonopoly regulations - Japan, the USA, Germany - the main energy organization scheme is energy systems, i.e. concentration of generating capacities and transmission networks in one hand.
All the more careful study requires the idea of disaggregating the energy industry by creating independent regional energy systems. The level of competition in the industry is unlikely to increase, but the isolation of the regions will increase. In addition, the country's unified energy system provides savings, as it allows to use the capacities of the western regions that are “sleeping” during these hours to cover the daily consumption peak in the eastern part of Russia and vice versa (the benefits of horizontal integration).
When citing the reform of Russian monopolies, one should keep in mind their positions in international competition. For example, RAO Gazprom is the largest international corporation. Its restructuring could undermine Russia's position in the global gas market. In general, it is obvious that the reforms of structures, including the natural monopoly sphere, should be carried out in stages, with great care and analysis of each stage of transformation.
3. State and market methods of regulation of tariffs of natural monopolies
3.1. The need for state regulation of tariffs
There is a strong belief in the need for state regulation of the tariffs of natural monopolies. The use of state regulation is considered justified in cases where a certain product (service) is produced by a single economic entity, provided that competition between similar enterprises is inefficient for technological or economic reasons, and the growth in production of a single entity is accompanied by a decrease in unit costs.
However, the concentration of production and the ability to dictate their terms to the market often contribute to overpricing their products, inflating costs in the event of state regulation of tariffs and discrimination against other market entities. AND real situation cases of the monopolist is carefully concealed information.
The need for state regulation of tariffs has not been and is not being questioned. At the same time, it is often forgotten that price regulation, in accordance with Article 6 of the federal law of August 17, 1995 No. 143-F3 "On Natural Monopolies", is only one of the methods for regulating the activities of subjects of natural monopolies. Moreover, the mandatory use of this method is not legally fixed, it can only be applied.
The state often takes the path of direct regulation of prices for the services of natural monopolies, the main tasks of which are:
Achieving a balance of interests of consumers and subjects of natural monopolies, ensuring the availability of the goods they sell;
Determining the structure of tariffs based on the principles of fair and efficient allocation of costs to tariffs for various consumers;
Stimulation of natural monopolies to reduce costs and excessive employment;
Using the possibilities of price regulation mechanisms in pursuing a stabilizing macroeconomic policy.
However, the direct regulation of tariffs in itself does not at all mean that the state policy in the field of natural monopolies is carried out effectively.
3.2. Advantages and disadvantages of state and market methods of tariff regulation
Today the government has enough good reason in order to abandon state regulation of the tariffs of natural monopolies. Comparative analysis such regulation with market regulation seems to be of interest (Table 1). In this case, market regulation refers to the regulation of natural monopolies within the framework of antimonopoly legislation.
When tariffs are set administratively, the monopoly's incentives to cut costs are weakened. Monopolies focus on "knocking out" the highest possible tariffs. At the same time, the responsibility for the level of tariffs lies with the state. Of course, if the proposals of the monopolists are not accepted by the government bodies, the latter are forced to carry out work to reduce costs as well. However, these are just forced steps on their part.
The abolition of direct price regulation will give a tangible impetus to natural monopolies to optimize their own costs. Being on an equal footing with other entities economic activity situation and obeying exclusively the norms of antimonopoly legislation, natural monopolies will have a greater incentive to reduce costs than to raise tariffs. Constantly at the risk of falling under the sanctions of regulatory authorities. Reducing costs in many ways becomes natural, not forced.
Table 1 - Advantages and disadvantages of various ways to regulate the tariffs of natural monopolies from the point of view of the state
Market regulation
1. The state solves the main problem - it does not allow tariff increases for longer than it considers necessary.
2. Ease of control over the level of prices for products of natural monopolies.
The possibility of administrative influence on the activities of natural monopolies.
4. Accounting for social consequences when setting tariffs.
1. Natural monopolies seek to set the highest possible tariffs.
2. The state is responsible for the level of tariffs set.
1. Reducing government costs associated with the practice of setting tariffs.
2. Concentration of all control functions in one (antimonopoly) body.
3. In general, it is not beneficial for monopolies to raise tariffs, since there is a threat of sanctions from the antimonopoly body.
4. Natural monopolies have a greater incentive to cut costs than to raise tariffs.
1. It is difficult to prove the fact of abuse of dominant position by natural monopolies.
2. The mechanism for resolving such cases through the judicial system has not yet been worked out.
3. The term of consideration of the case may take a long time.
In addition, the effectiveness of market control will be manifested in the reduction of government costs associated with the constant revision of tariffs, as well as with the financing of government bodies that perform the functions of state regulation of tariffs.
The main disadvantages of the market mechanism for tariff regulation are related to the shortcomings of the current antimonopoly legislation. However, these shortcomings do not concern the exclusivity of natural monopolies as objects of antimonopoly control, but the general shortcomings of competition law, which also manifest themselves in competitive sectors of the economy. Thus, it is worth talking in general about the improvement of antimonopoly legislation, including in relation to the regulation of natural monopolies.
The natural monopolies themselves are in a twofold situation (Table 2).
On the one hand, the centralized setting of tariffs relieves them of many problems. They are not liable to the antimonopoly authorities even in the case of setting inflated tariffs; monopolies are actually insured against unsuccessful investments, since the costs will be included in the tariffs, and therefore transferred to consumers; there is no need for major cost reductions.
Table 2 - Advantages and disadvantages of various ways of regulating the tariffs of natural monopolies from the point of view of natural monopolies
State regulation
Market regulation
1. Shifting responsibility for the level of tariffs to the state bodies that make the relevant decisions.
2. Lack of control by the antimonopoly authorities.
3. Possibility of setting higher tariffs than under market regulation.
4. There are no incentives to reduce costs.
5.Insurance against unsuccessful investments, as the costs will be passed on to consumers.
1. Tariffs cannot be set higher or lower than those determined by the government of the Russian Federation.
2. It is impossible to unilaterally change tariffs.
3. Sometimes it is simply beneficial to reduce costs, since tariffs can be reduced by the amount of cost reduction in the next period.
4. When setting tariffs, the interests of natural monopolies are not fully taken into account.
1. Tariffs are set by the monopoly itself. Consequently, at the stage of pricing, the state does not interfere in the activities of the company.
2. Regardless of the level of tariffs, natural monopolies have the opportunity to prove their validity in court.
1. Responsibility for setting inflated tariffs to the antimonopoly body.
On the other hand, there are equally significant disadvantages. Administrative control does not allow natural monopolies to independently build a strategy for any long period.
Responsibility to the antimonopoly authorities in the case of market regulation can hardly be attributed to shortcomings. In fact, there is a replacement of one controlling body by another. At the same time, the actions of the antimonopoly authorities are clearly more transparent and predictable. In addition, even in the event of sanctions from the regulatory authorities, the monopolies will always have the opportunity to challenge the verdict in court.
In addition, this kind of responsibility, generally speaking, can be attributed to pluses. After all, it will force natural monopolies not to beg for tariffs, but to optimize their activities, refusing to additional costs while introducing advanced control technologies.
For consumers of services of natural monopolies, one can also distinguish the advantages and disadvantages of state and market regulation of tariffs (Table 3).
Perhaps the main advantage of state regulation for consumers is that the state takes into account the social aspect. That is, regardless of economic preconditions the state always looks back at the ability of the population to pay for the services of natural monopolies. In crisis situations, the state can take even more radical measures and deliberately reduce tariffs in order to mitigate the consequences of crises. As practice shows, prices still "take their toll". However, in the short term, consumers can indeed hope to have their interests taken into account by the state.
The disadvantages include the fact that throughout the entire period economic reforms(with the exception of the period 1991 - 1992) the tariffs of natural monopolies grew at a higher rate than the prices for products of almost all other sectors of the economy. This means that the state was not able to keep them at least at the level of average economic indicators in the long term. That is, it can be stated that, since 1993, the consumer overpaid for the services of natural monopolies.
It is also important that state regulation leaves no opportunity for consumers to protest the established tariffs. In the conditions of market pricing, there is always the opportunity to file a lawsuit in court.
Table 3 - Advantages and disadvantages of various ways of regulating the tariffs of natural monopolies from the point of view of consumers
State regulation
Market regulation
1. Tariffs cannot be higher than those established by the government of the Russian Federation, that is, the social aspect of the problem is taken into account.
2. Tariffs are set for a certain period.
1. Tariffs are set at a fairly high level, as evidenced by the comparative dynamics of tariffs in regulated and non-regulated industries.
1. In general, it is not beneficial for monopolies to raise tariffs, since there is a threat of sanctions from the antimonopoly body.
2. In case of tariff overstatement, it is possible to file a claim with the antimonopoly body.
1. In case of abuse of the monopoly of its position, the burden of additional costs falls on consumers.
From the point of view of consumers, the main plus is that it becomes unprofitable for monopolies in general to increase tariffs, since there is a threat of sanctions from the antimonopoly authority. With state regulation, there is no threat of sanctions. Thus, the effectiveness of market regulation is higher in comparison with state regulation.
At the same time, it should be taken into account that there is no threat, traditional in the market environment, when the prices of competitors are lower, because the position of the monopolist remains.
4. Prospects for development and consequences of natural monopolies
4.1. Economic consequences monopolies
Despite the fact that the market under monopoly is in equilibrium, and the monopolist can have efficient production, monopoly markets are inefficient. In a monopoly, the market price of products is higher than the marginal cost of its production, which indicates an inefficient allocation of resources.
The monopoly market is smaller than the competitive market and is carried out at average long-run costs above the minimum, which indicates a lower efficiency in the use of resources. By producing too little output and selling it at too high a price, a monopoly leads to a reduction in social welfare.
Assume that the demand function D is linear, the firm's marginal cost is equal to MC (Fig. 3). In this case, the monopoly output will be Q against the competitive Q at the corresponding prices P and P. The excess of the monopoly price over the competitive one means that a part of the consumer surplus equal to the area of rectangle A. is redistributed in favor of the monopolist and appropriated to them in the form of monopoly profit. A smaller volume of monopoly output compared to the competitive volume indicates the loss of a part of consumer surplus equal to the area of triangle B, and a part of producer surplus equal to the area of figure C. The total welfare loss will be equal to the sum of losses on the part of the consumer and the producer, i.e. (-A - B) + (A - C), which will give a loss equal to (B + C). Therefore, the essence of the problem is not the redistribution of wealth in favor of the monopolist, but that monopolism leads to a net loss of social welfare. Representing the social cost of inefficiency, the net welfare loss is the social cost of monopoly. Moreover, even if part of the monopoly profit is redistributed in favor of consumers through its taxation, full efficiency will not be achieved, since the volume of supply under monopoly conditions is less than the competitive one.
4.2. Prospects for the development of natural monopolies
It should be noted that only a part of the types of economic activity carried out in such industries as the gas industry, electric power industry, railway transport and communications, in fact, refers to a natural monopoly. Other types of economic activity can potentially function effectively in a competitive environment, but the creation of a competitive environment implies the need for adequate structural changes. For example, production in both the electric power industry and the gas industry, in contrast to the transportation and distribution of resources, is objectively not a natural monopoly. In rail transport, competition with other modes of transport either already exists, or its emergence is possible if a number of conditions are met. Ideally structural changes in these industries, allowing maximum use of the competitive forces of the market will lead to a limitation of the scope of state regulation. However, the correct implementation of the reconstruction will not only limit the scope of regulation, but also increase its effectiveness through a clear separation of regulated and unregulated economic activities. If such activities are not separated and are carried out within the same enterprise, the task of setting the permitted price level facing the regulators becomes more complicated due to the impossibility of accurately calculating the costs that should be attributed to regulated activities. In the electric power industry, gas industry, communications industries and railway transport, a number of transformations must be carried out that will contribute to solving the problems described above:
Regulated and unregulated activities should be separated from each other as much as possible in the current economic, social and political conditions. Separation of accounts and balance sheets is the minimum requirement, but the best solution to the problem may be to create independent
enterprises for each type of activity. First of all, it is necessary to separate production functions from transport and separation. In the same way, it is necessary to transform social infrastructure enterprises:
Regulated activities should be characterized by openness of information for regulatory authorities, which will allow setting prices (tariffs) at a level high enough to ensure normal profitability and, accordingly, attract new investments;
Competitive segments of industries should be identified and reorganized in order to form a real competitive environment.
Thus, independent diversified companies should be formed in the electric power industry, which could compete directly in the wholesale market. A competitive environment can be created in the gas industry;
Competition can develop in the above areas only if the regulatory authorities create the appropriate conditions. Thus, producers of electricity and natural gas need open, non-discriminatory access to transport systems, and Licensing procedures that determine barriers to entry into the relevant markets should be open and non-discriminatory;
The investment process must be brought into line with the requirements of a market economy. In almost all branches of natural monopolies, investments are financed primarily through the growth of tariffs. At present, sectoral investment and stabilization funds are not effective tool financing investments and are often misused. Tariff financing of investments should be drastically reduced and companies should be encouraged or even forced to use debt and equity capital;
In all branches of natural monopoly, further improvement of the pricing mechanism is necessary. In the gas industry, prices should be differentiated taking into account the cost of delivering natural gas to different regions. Railway tariffs should also be differentiated by regions, ending the centralized redistribution of revenues between railways.
Cross-subsidization of preferential users at the expense of enterprises, which is used in all branches of natural monopolies, must be stopped.
Subsidies that are deemed necessary (for example, for low-income segments of the population) should be provided from the federal or local budgets, and not at the expense of other consumers of relevant resources and services.
These are the main transformations of the infrastructures of natural monopolies, contributing to their development.
Conclusion
While doing the work, I realized that the loss of public welfare and the X-inefficiency indicator are forms of efficiency reduction in a monopoly. The reason for the first is not the inability to optimize production, but the second - the lack of competition. Monopoly leads not only to negative consequences - it also provides some benefits. First, by allowing for economic profits, market power creates greater opportunities for firms to innovate and encourages scientific and technological progress especially when barriers to entry into the industry are low. Secondly, bargaining power leads to savings in information costs, since the brand itself is already information for the consumer. Thirdly, under conditions of monopoly, there is the possibility of a fuller extraction of economies of scale and production at lower costs than in conditions of perfect competition.
Summing up the whole work, it follows that:
State regulation of the tariffs of natural monopolies should be replaced by market mechanisms of regulation (through the application of relevant norms of antimonopoly legislation);
Antimonopoly legislation needs serious reform. imperfection current legislation concerns general provisions and manifests itself not only in terms of regulating the activities of natural monopolies, but also in relation to competitive sectors of the economy;
Market regulation of tariffs of natural monopolies, as an alternative to state regulation, is generally a more effective mechanism that allows, in parallel with taking into account the interests of consumers of services of natural monopolies and the state, the qualitative development of natural monopolies themselves.
NATURAL MONOPOLIES AND THEIR REGULATION
Regulation of competitive industries. Perhaps the most profound criticism of industry regulation is that it has sometimes been applied to industries that are not natural monopolies and that would have been fully competitive without regulation. Regulation has been used particularly in industries such as freight and air travel, where economies of scale are small and natural barriers to entry of new competitors into the industry are relatively weak. It is argued that in such cases, the regulation itself, by restricting entry into the industry, creates a monopoly rather than the conditions depicted in Fig. 24-1. The result is higher prices and lower output than they would have been without regulation. Contrary to the theory of regulation in the public interest, it is the regulated firms themselves and their employees who benefit from regulation. The losers are society and potential competitors, for whom it is difficult to enter the industry.
Economic argument against monopoly - the loss of "dead weight" associated with the inefficient allocation of production resources - was not the direct cause of the development of antitrust laws. Their goal is much broader - to promote the protection of competition in general. There are a number of industries in which a monopoly is necessary (the so-called natural monopoly), and the state is faced with the task of regulating prices and production volumes in the public interest.
The functions of the FEC, in particular, are to set tariffs for electricity in the federal wholesale electricity market, to establish, upon the proposal of regional energy commissions, the maximum fees for services for the transmission of electricity through the networks of organizations included in the register of natural monopolies and located in the territories of the corresponding constituent entities of the Russian Federation and control over the amount of payment for these services development of proposals for improving existing and adoption of new federal laws and other regulatory legal acts in the field of tariffs for electric and thermal energy consideration of disagreements arising between regional energy commissions, consumers whose electricity is supplied from the federal wholesale market electrical energy, and energy supply organizations at their request, and making decisions on the disputes under consideration with the establishment of limit values of tariffs for end consumers that are mandatory for application. tariffs. The list of commercial organizations - subjects of the federal wholesale electricity market, for which electricity tariffs are set by the Federal Energy Commission, was approved by Decree of the Government of the Russian Federation of July 12, 1996 No. 7931.
There is a clear need to streamline the pricing of products and services of natural monopolies. In 1996, the main direction of state regulation was to limit the growth of prices and tariffs for products of natural monopolies within the inflation rate in industry in accordance with the government decree of February 12, 1996 "On measures to limit the growth of prices and tariffs for products (services) of natural monopolies" . Freezing prices and tariffs in the fourth quarter of 1995 and limiting their growth in the first half of 1996 made it possible at first to reduce price imbalances in industry and contributed to a reduction in the rate of inflation. But recently, the financial condition of many enterprises in the natural monopoly sectors has deteriorated sharply compared to 1995; In all industries, except for the gas industry (including gas transportation), the profitability of production has decreased due to the outpacing growth in costs. In the electric power industry, having decreased by 3.5 percentage points, profitability in 1996 reached the highest low level behind last years. In addition to a 2-3-fold increase in depreciation charges, the cost of cross-subsidization for certain categories of consumers increased in all industries. From August 1, 1996, by decision of the Federal Energy Commission, electricity tariffs were increased 1.56 times. As a result, the overall rise in prices in the energy sector amounted to 11.6%. The outstripping growth of tariffs in the electric power industry again worsened price ratios for consumers. On October 17, 1996, a presidential decree "On additional measures to limit the growth of prices (tariffs) for products (services) of natural monopolies and create conditions for stabilizing the work of industry" was issued. In accordance with it, from November 1, the prices for electricity and services of the UES of Russia were reduced by an average of 10%, wholesale prices for gas supplied by RAO Gazprom were frozen. As a result, the growth rates of producer and industrial prices at the end of 1996 decreased to 0.9%.
In a number of industries, it is impossible to avoid the formation of monopolies (natural monopolies), and the state is forced to carry out their indirect regulation. The main method of regulation of natural monopolies is the regulation of prices and tariffs for the goods and services provided.
Traditional operators included in the register of subjects of natural monopolies operating in the telecommunications markets of Russia find themselves in a difficult economic situation. Almost all of them have a worn-out technical base, are burdened with obligations to provide services for federal needs and provide social benefits. Most of them have a low yield per line, which does not allow guaranteeing even simple reproduction. In formulating their strategic goals, they focus not so much on sustainable development as on solving the problem of survival. Currently, regulatory measures are applied directly to the economic entity of natural monopoly and affect all types of its activities, including those that are not related to the monopoly market. Thus, they are put in unequal conditions with their competitors. Due to the regulation of their activities under the Federal Law on Natural Monopolies, they cannot pursue an adequate marketing policy in the market, make investments and attract material and human resources on the same terms as new operators.
To better understand monopolies and their role in a market economy, consider 1) price discrimination and 2) government regulation of natural monopolies.
A special place among the spheres of state monopolistic regulation belongs to the state and natural monopoly. The legal regime of their functioning is exclusive both in legal nature and in their position in the general system. regulation economic and economic relations, since it partially limits the operation of the principle of freedom of economic activity. Based on this, in our opinion, a legislative definition is necessary. legal status and the mechanism for implementing the regime of these monopolies.
In August 1995, the Law of the Russian Federation On Natural Monopolies came into force, work began on the creation of bodies for their regulation at the federal level. According to this law, the scope of regulation includes transportation of oil and oil products through main pipelines, transportation of gas through pipelines, services for the transmission of electrical and thermal energy, rail transportation, services of transport terminals, ports and airports, public electric and postal services.
The scheme of state regulation of natural monopolies, based on the indexing of tariffs (prices) and not accompanied by a thorough check of the reasonableness of costs and investment activity, allows monopolists to easily bypass the restrictions that the regulatory authorities put in their way.
Regulation and ownership. In natural monopolies, i.e. industries where technical and economic factors preclude market competition, the government created public commissions to regulate prices and quality standards for their services. Industries that are more or less subject to such regulation include transport, communications, electric power and other public utilities. And at the level of local governments, state ownership of electricity and water supply enterprises has been extended.
However, government regulation is the most widely used in the US. In table. Table 32-1 lists the major federal regulatory commissions and their areas of jurisdiction. All states also have such regulators, occupied by state-based natural monopolies. The regulated sector produces 7% of the national output.
The aforementioned Decree recognizes the concept of further price liberalization. State regulation of prices should be carried out mainly in relation to the products of natural monopolies. In addition, the Government of the Russian Federation is instructed to determine (taking into account the norms established by the legislative acts of the Russian Federation) and approve lists of industrial and technical products, consumer goods and services, the prices for which on the domestic market of the Russian Federation are subject to state regulation, and also to revise them according to as necessary, with a view to further price liberalization.
Article 6 of the law under consideration provides for two main ways to regulate the activities of subjects of natural monopolies - price and non-price. The price method is carried out by determining (establishing) prices (tariffs) or their limit level. At the same time, the procedure for state regulation of prices (tariffs) for products (services) of natural monopolies is provided for by a number of special documents.
The natural monopoly regulatory body may refuse to satisfy the specified application if the actions declared in it threaten negative consequences, as well as in cases where the applicant does not submit all the necessary documents or, during their consideration, it is found that the information contained in them (of significant importance) is unreliable. The natural monopoly regulatory body not later than 30 days from the date of receipt of the application informs the applicant in writing about its decision, consent or refusal. Refusal must be motivated. If additional information is needed to make a decision, then the natural monopoly regulator has the right to request it from the applicant and increase the time for consideration of the application by 30 days (if the request, together with the notification, was sent to the applicant no later than 15 days from the date of receipt of the application). If, within 15 days from the date of expiration of the period for consideration of the application, the response of the natural monopoly regulatory body is not received, or
In the course of market reforms, when Vodokanals spun off into separate enterprises, the state, realizing their position as local natural monopolies, took regulatory measures. In particular, prices (tariffs), drinking water quality, service standards (frequency of supply, quality and pressure of water, maintenance and repair of networks, etc.), environmental standards are subject to regulation.
Almost all monopoly resource providers are classified as natural monopolies. In accordance with the law, the prices for their products are not free market prices, but are regulated in one way or another. Therefore, in real life, it is difficult to see a picture from a textbook when there is a single supplier in the resource market who is free to set prices that maximize his profit. However, this tendency is always present and can be observed in the form of various attempts to circumvent price regulation.
The state has big problems with the regulation of natural monopolies, first of all, they include Gazprom, RAO UES of Russia and the Ministry of Railways. They have the ability to dictate monopoly prices and wages here are twice as high as in the Russian manufacturing industry, although our monopolists have the highest level of non-payments (almost 50% of non-payments are non-payments to energy companies by enterprises), but they derive even more from non-payments. Thus, a number of goods, for example, rails, have practically no price in "live money". The Ministry of Railways takes the rails on barter, and then puts their tripled cost in construction estimates, and then in super-high tariffs, which give rise to a new circle of non-payments.
The object of special regulation in the United States are natural monopolies. Their existence depends on economies of scale, when one firm is able to supply the market with a product at a price lower than if competing firms could do it. The behavior of a natural monopoly in the market is determined by state ownership and government regulation, which is carried out by federal regulatory commissions (Federal Commission on Interstate Commerce, Federal Energy Management Commission, Federal Communications Commission). Profound qualitative changes that occurred in the world economy in the 80s and early 90s led to the liberalization of antitrust regulation in the United States.
The impossibility and inexpediency of competition in the sphere of natural monopoly, as well as the paramount importance of the activities of enterprises in these industries for the livelihood of the population, require special approaches to their regulation. Prices for goods and services of natural monopolies are an important component of the cost of production of other industries. Therefore, an increase in prices for goods (services) of these industries inevitably leads to an increase in prices for all goods and services and in some cases makes them uncompetitive in foreign markets, including the market of the CIS countries.
In the rest of the chapter, we will focus on those aspects of regulation that are not a response to the problem of monopoly power. In paragraph 3, we are talking about economic feasibility and the actual consequences of one of the most important programs of social regulation - programs for environmental protection. Section 4 deals with the problems of social regulation aimed at protecting workers and consumers from health, safety and other risks. Finally, paragraph 5 describes the recent advocacy of deregulation (to loosen