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Scale effect at ProZorro public procurement system: the expected effect of centralization

Author

Listed:
  • Kateryna Marushchak
  • Adam Hashchyshyn
  • Oleksandr Sukhomlyn
  • Andreii Tarasenko

    (Kyiv School of Economics)

Abstract

The centralization of public procurement can be the source of a reduction in public spending due to the scale effect. To investigate its effect in public procurement, the relationship between the volume of tender procurement and the price per unit of goods under the contract for 12 commodities of the food industry was analyzed. As a result of the research, it was discovered that an increase in purchases by centralization could reduce the price per unit when purchasing flour, beet, cabbage, potatoes, pork, onions, apples and beef, while for purchases of sugar, pasta and butter of high value the effect was not observed. This suggests that the centralization of public procurement can increase the efficiency of using budget funds, which is consistent with the objectives of the ProZorro project.

Suggested Citation

  • Kateryna Marushchak & Adam Hashchyshyn & Oleksandr Sukhomlyn & Andreii Tarasenko, 2019. "Scale effect at ProZorro public procurement system: the expected effect of centralization," Modern Economic Studies, Kyiv School of Economics, vol. 2(1), pages 81-89.
  • Handle: RePEc:kse:modern:v:2:y:2019:i:1:p:81-89
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    More about this item

    Keywords

    public procurement; Prozorro; scale effect; centralization;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • D49 - Microeconomics - - Market Structure, Pricing, and Design - - - Other

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