Procurement at Local Government Level – Issues and Controversies

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.

Business’ Attitudes Towards Corruption in Selected Central European Countries

“…Scholars' interest in corruption in public procurement is understandable, as public procurement mechanisms in the EU were created to prevent corruption in local government. However, apart from the fact that corrupt officials still try to circumvent the restrictions, there are concerns that public procurement leads to centralization of decision-making at a higher level of administration, which could mean that corruption takes place up the ladder (Kaštelan Mrak et al, 2016). The study published by Kutnjak Ivkovich et al ( 2022) focuses on corruption within the police and examines the factors that influence the willingness to report police misconduct.…”