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New article in Public Money & Management

Journal of Public Money & Management accepted for publication a new article “Public procurement transaction costs: A country-level assessment" by Olga Balaeva, Andrei Yakovlev,  Yuliya Rodionova and Daniil Esaulov


Abstract: 

This paper presents a public procurement transaction cost evaluation using a large-scale survey of procurers and suppliers conducted in Russia in 2017. The results of the survey confirmed that the lower the contract value, the more expensive the implementation and administration of procurement procedure. An empirical analysis of factors impacting public procurement cost evaluation also revealed considerable differences between respondents with and without complex procurement procedures experience. 
Proposed survey-based approach to the evaluation of public procurement costs can be used on large samples, making possible the analysis of public procurement costs by countries (regions). Although the average overall transaction costs for public procurements 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 budget saving from competitive procurement and calls for a need to simplify regulation of such procurements.