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Factors Explaining Price Decrease and Problems by Execution of Public Procurement Contracts in Russia

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  • A. Yakovlev
  • O. Demidova
  • O. Balaeva

Abstract

The main goal of the public procurement reform in Russia was to limit corruption. The government prohibited the most part of qualification criteria in the selection process and used open auctions as the main tool of contract placement. However simplification of procurement procedures led to opportunism on the side of suppliers. In this paper using the unique dataset of 2000 contracts executed in 2008-2010 for a large public customer we define the factors explaining the risk of suppliers non-performance. Econometric analysis showed that under current procurement regulation in Russia the risks of suppliers non-performance are higher for large contracts, contracts executed in October-December and contracts placed at open auctions. However contrary to anecdotal evidences, initial price decrease does not influence the performance of contractors.

Suggested Citation

  • A. Yakovlev & O. Demidova & O. Balaeva, 2012. "Factors Explaining Price Decrease and Problems by Execution of Public Procurement Contracts in Russia," Voprosy Ekonomiki, NP Voprosy Ekonomiki, issue 1.
    • Handle: RePEc:nos:voprec:y:2012:id:759
    DOI: 10.32609/0042-8736-2012-1-65-83
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    Cited by:

    1. Belev, S. & Veterinarov, V. & Matveev, E., 2023. "Vertical collusion in public procurement: Estimation based on data for R&D composite auctions," Journal of the New Economic Association, New Economic Association, vol. 59(2), pages 36-63.

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