Two papers on public procurement prepared by IIMS research fellows were published this week: "Russian system of public procurement: the law is changing, the issues remain" and "Organizational Forms and "Incentives in Public Procurement: Natural Experiment at a Large Public Sector Organization in Russia" were published in the International Journal of Public Procurement".
The article "Russian system of public procurement: the law is changing, the issues remain" was published in "ЭКО" journal . It examines the problems of the Russian public procurement system based on the analysis of assessments from a mass survey of both customers and suppliers. It is shown that despite a significant change in legislation, most of the problems that were noted by researchers and practitioners 7–8 years ago remain including price dumping, regulatory collisions and low competition in public bids. The paper analyses the differences in assessments of these problems with respect to the respondents’ experience and other factors. We also claim that one of the reasons for the lack of positive developments in the perception of procurement regulation is that the changes in the legislation were based on the interests of government agencies and did not take into account the needs and opinions of immediate participants of procurement process. On this basis we formulate proposals for conducting regular monitoring of opinions and assessments of ordinary customers and suppliers.
Another paper "Organizational Forms and Incentives in Public Procurement: Natural Experiment at a Large Public Sector Organization in Russia" was published in the International Journal of Public Procurement. It analyses how the intensification of centralized monitoring within public organization may impact incentives for efficiency in those divisions of the organization that have different levels of financial autonomy. The efficiency of divisions’ activities was estimated through their procurement effectiveness. All the divisions were classified as non-commercial units (NCU) funded by the government or as income earning units (IEU) operating in the market and having broader financial autonomy. The results show that under standard monitoring, the IEU had more efficient procurements compared to the NCU. After intensification of centralized monitoring, the differences in performance became insignificant. These findings show that stricter monitoring is efficient for organizations with soft budget constraints, while for organizations with hard budget constraints it is preferable to use more flexible regulations.