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Incentives for repeated contracts in public sector: empirical study of gasoline procurement in Russia

Author

Listed:
  • Andrei Yakovlev
  • Oleg Vyglovsky
  • Olga Demidova
  • Alexander Bashlyk

Abstract

Contrary to previous studies of 'relational contracting' this paper analyses the impact of repeated procurements on the price of a simple homogeneous product. Using a large dataset on procurements of AI-92 gasoline in Russia in 2011, we show that price difference between repeated and one-time contracts can be explained by the type of procurement procedures. Less transparent procedures (single-sourcing and requests for quotations) are more suitable for corrupt collusion. This might explain relative price increase in this case. On the contrary, the prices of repeated contracts were lower compared to one-time procurement in the case of more transparent e-auctions.

Suggested Citation

  • Andrei Yakovlev & Oleg Vyglovsky & Olga Demidova & Alexander Bashlyk, 2016. "Incentives for repeated contracts in public sector: empirical study of gasoline procurement in Russia," International Journal of Procurement Management, Inderscience Enterprises Ltd, vol. 9(3), pages 272-289.
    • Handle: RePEc:ids:ijpman:v:9:y:2016:i:3:p:272-289
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    Cited by:

    1. Dmitry I. Ivanov & Alexander S. Nesterov, 2019. "Stealed-bid Auctions: Detecting Bid Leakage via Semi-Supervised Learning," Papers 1903.00261, arXiv.org, revised Nov 2020.
    2. Anastasia Eremina & Irina Zoroastrova & Andrey Maksimov, 2018. "Empirical analysis of municipal peculiarities influence on price outcomes of public purchases," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 51, pages 84-101.
    3. David Szakonyi, 2018. "Private Sector Policymaking," Working Papers 2018-8, The George Washington University, Institute for International Economic Policy.
    4. Plaček, Michal & Valentinov, Vladislav & del Campo, Cristina & Vaceková, Gabriela & Ochrana, František & Šumpíková, Markéta, 2021. "Stewardship and administrative capacity in green public procurement in the Czech Republic: Evidence from a large-N survey," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 33.
    5. Tkachenko, Andrey & Yakovlev, Andrei & Kuznetsova, Aleksandra, 2017. "‘Sweet deals’: State-owned enterprises, corruption and repeated contracts in public procurement," Economic Systems, Elsevier, vol. 41(1), pages 52-67.
    6. Dennis Coates & Iuliia Naidenova & Petr Parshakov, 2019. "Determinants of governmental support of Russian companies: lessons on industrial policy, rent-seeking and corruption," Constitutional Political Economy, Springer, vol. 30(4), pages 438-466, December.
    7. Pavlova, Natalia (Павлова, Наталья) & Meleshkina, Anna (Мелешкина, Анна), 2017. "Anti-Corruption and Protection of Competition [Противодействие Коррупции И Защита Конкуренции]," Working Papers 041707, Russian Presidential Academy of National Economy and Public Administration.

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    JEL classification:

    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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