When designing a national public procurement system, the degree of centralization (or, equivalently, the degree of demand aggregation) is one of the most crucial as well as puzzling policy choices. Centralized procurement has been traditionally considered as an instrument to reduce public spending. In more recent years, though, and particularly after the 2008 global financial turmoil, a growing interest has arisen among both policy makers and researchers in government procurement as a lever to pursue broader policy goals, such as competitive markets structure, sustainable development and innovation. This paper reviews and discusses several issues related both to the rationales and to the practical implementation of centralized procurement strategies, with a particular focus on the procurement of goods and services.
When designing a national public procurement system, the degree of centralization (or, equivalently, the degree of demand aggregation) is one of the most crucial as well as puzzling policy choices. Centralized procurement has been traditionally considered as an instrument to reduce public spending. In more recent years, though, and particularly after the 2008 global financial turmoil, a growing interest has arisen among both policy makers and researchers in government procurement as a lever to pursue broader policy goals, such as competitive markets structure, sustainable development and innovation. This paper reviews and discusses several issues related both to the rationales and to the practical implementation of centralized procurement strategies, with a particular focus on the procurement of goods and services
The model introduced by Goodwin [1967] in "A Growth Cycle" represents a milestone in the nonlinear modeling of economic dynamics. On the basis of a few simple assumptions, the Goodwin Model (GM) is formulated exactly as the well-known Lotka-Volterra system, in terms of the two variables "wage share" and "employment rate". A number of extensions have been proposed with the aim to make the model more robust, in particular, to obtain structural stability, lacking in GM original formulation. We propose a new extension that: (a) removes the limiting hypothesis of "Harrod-neutral" technical progress: (b) on the line of Lotka-Volterra models with adaptation, introduces the concept of "memory", which plays a relevant role in the dynamics of economic systems. As a consequence, an additional equation appears, the validity of the model is substantially extended and a rich phenomenology is obtained, in particular, transition to chaotic behavior via period-doubling bifurcations.
We report the results of a procurement experiments where subjects compete for procurement contracts to be awarded by means of a scoring auction. Two experimental conditions are considered, depending on the relative quality-price weight in the scoring rule. We show that different quality-price weights in the scoring rule dramatically alter the strategic environment and affect the extent to which the competitive mechanism leads to an efficient allocation of the contract. Our evidence suggests that, in spite of inducing significantly higher deviations from equilibrium, the scoring rule that gives more weight to quality over price is far more efficient (52% overall). We propose a "mediation analysis" to explain how the quality-price ratio determines the likelihood that an efficient allocation is realized, disentangling a "direct effect" (due to the equilibrium different properties of the induced game-forms) from an "indirect" one (how the different game-forms affect out-of-equilibrium behaviour).
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