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Public Procurement Transaction Costs: A Country-Level Assessment Based On Microdata

Author

Listed:
  • Olga N. Balaeva
  • Andrei A. Yakovlev

    (National Research University Higher School of Economics)

  • Yuliya D. Rodionova
  • Daniil M. Esaulov

    (National Research University Higher School of Economics)

Abstract

Public procurement cost evaluation is important both for procurement optimization at the company level and for evaluating the public procurement regulatory system. This paper presents a survey-based methodological approach to public procurement cost evaluation at the macro level. Our approach is based on a methodology for assessing the efficiency of public procurement developed by PwC for the European Union. The PwC methodology was adapted to developing and transitional economies and piloted on Russian data. Average costs of each type of procurement procedure implemented in 2016 were evaluated. A regression analysis of factors impacting public procurement cost evaluation revealed considerable differences between respondents who have and do not have experience with complex procurement procedures. Although the average overall costs of public procurements in Russia amounted to about 1% of the total value of concluded contracts, the figure stands at 6.6–8.1% for small purchases. This exceeds the economy from price decreases and calls for a need to simplify regulation of such procurements.

Suggested Citation

  • Olga N. Balaeva & Andrei A. Yakovlev & Yuliya D. Rodionova & Daniil M. Esaulov, 2018. "Public Procurement Transaction Costs: A Country-Level Assessment Based On Microdata," HSE Working papers WP BRP 20/PSP/2018, National Research University Higher School of Economics.
    • Handle: RePEc:hig:wpaper:20/psp/2018
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    References listed on IDEAS

    as
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    1. Anna I. Denisova & Dzhamilya A. Sozaeva & Konstantin V. Gonchar & Griegory A. Aleksandrov, 2023. "Improving the Methodology for Assessing the Economic Efficiency of Public E-procurement of Medicines," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 4, pages 63-81, August.

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    More about this item

    Keywords

    public procurement; public procurement costs; public customers; suppliers.;
    All these keywords.

    JEL classification:

    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights

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