(Public Procurement) Political Economy of Cost Savings: Fixing a Main Institutional Failure
2 Pages Posted: 16 May 2017
Date Written: 2010
Research on government e-procurement suggests the existence of price savings ranging from 5% to 20% of the total value of public purchases, which also account for a significant part of GDP. Nevertheless, there is no clear view about the consequences of that saved money. This paper points out, contradicting the common knowledge, the reasons why price savings in public procurement causes an institutional failure. It also describes the type of policy instrument needed to solve the described failure caused by price savings captured by institutions (= procurement entities) in which ICTs must play a key role.
Keywords: Public Procurement, Saving, Government Failures
JEL Classification: H57, H69, H83
Suggested Citation: Suggested Citation