Procurement at Local Government Level - Issues and Controversies

International Public Administration Review, Vol. 14, No. 4/2016

21 Pages Posted: 19 Jul 2017

See all articles by Marija Kastelan Mrak

Marija Kastelan Mrak

University of Rijeka - Faculty of Economics

Nenad Vretenar

University of Rijeka - Faculty of Economics

Jelena Antonić

University of Rijeka - Faculty of Economics

Date Written: 2016

Abstract

Local government, as administrative units, performs a broad range of services that require to establish relations with outside partners, including those belonging to the private sector. Public procurement, due to the size of the involved financial flows, is government activity especially exposed to inefficiencies, corruption and dishonesty. There is an everlasting discussion on the ideal size and the range of services to be kept “in-house” of local government units (LGUs). Transaction Costs Economics (TCE) represents a theoretical paradigm specially designed to interpret the issue of efficiency in inter-institutional relations. However, even though TCE might be envisaged as a tool for building better systems and institutions, practical experience suggests that efficient organization of complex multi-institutional systems is still a goal to be met. Therefore, public procurement procedures at LGU level are suitable to analyze the transaction costs. In an attempt to determine the main organizational features of the existing scope of institutions/entities involved in delivering services to citizens, we provided an overview of the complexity of inter-organizational relations at LGU level.

In this paper we present results of an empirical research of public procurement procedures from the perspective of LGUs in Croatia. Picking up on questionnaire responses from 200 LGUs that reported having held over 350 cases of providing services through contract agreements with “independent” service providers, we formed an opinion of what could be the consequences of developing more structured public procurement procedures.

Keywords: Economic Efficiency, Local Government Units, Public Procurement, Public Administration, Transaction Costs

JEL Classification: H57, H83, L14

Suggested Citation

Mrak, Marija Kastelan and Vretenar, Nenad and Antonić, Jelena, Procurement at Local Government Level - Issues and Controversies (2016). International Public Administration Review, Vol. 14, No. 4/2016, Available at SSRN: https://ssrn.com/abstract=3002379

Marija Kastelan Mrak (Contact Author)

University of Rijeka - Faculty of Economics ( email )

Ivana Filipovića 4
Rijeka, 51000
Croatia

Nenad Vretenar

University of Rijeka - Faculty of Economics ( email )

Ivana Filipovića 4
Rijeka, 51000
Croatia

Jelena Antonić

University of Rijeka - Faculty of Economics ( email )

Ivana Filipovića 4
Rijeka, 51000
Croatia

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