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Andrei Yakovlev 1, Alexandra Bashina 1,2, Olga Demidova 1
  • 1 National Research University Higher School of Economics, 20 Myasnitskaya Str., Moscow, 101000, Russian Federation
  • 2 National Research University Higher School of Economics, 16 Soyuza Pechatnikov Str., Saint Petersburg, 190008, Russian Federation

Efficiency of Simple Homogeneous Good Procurement under Rigid Governmental Regulation: The Case of Sugar Sand Procurement in Russia

2013. Vol. 17. No. 4. P. 649–677 [issue contents]
In 2000s Russian government considered e-auction as the best way to procure goods for public needs. In this paper we confirm this proposition using empirical dataset on 3 thousands contracts for procurement of sugar sand in Russia in 2011. Our data shows that unit prices are higher in the case of long-term contracts. This result can be explained by rigidity of public procurement regulation – because Russian legislation allows only fixed price contracts. Under these conditions suppliers can be ready to participate in public procurement tenders for long-term contracts only if their price includes some «risk premium» covering additional expenses of supplier in case of unfavorable turn in the market. Our analysis shows that sugar prices in Russian public procurement are lower for contracts with higher volume. These results are in the line with conclusions of previous studies of public procurement in other countries. Influence of competition measured by the number of suppliers participating in procurement procedure has quadratic form. It means that the effect of new participant is lower when number of competitors is higher and vice versa. Also our analysis shows that there are essential distinctions in influence of the same factors on contract prices for competitive procedures and void auctions. This result is important for economic policy but additional consideration is needed here.

Citation: (2013) Analiz effektivnosti razlichnykh sposobov zakupki prostogo odnorodnogo tovara (na primere sakharnogo peska) [Efficiency of Simple Homogeneous Good Procurement under Rigid Governmental Regulation: The Case of Sugar Sand Procurement in Russia]. HSE Economic Journal, 4, pp. 649-677 (in Russian)
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