The impact of e-procurement on institutional quality

Abstract

Purpose Because of the renewed interest in public purchasing and the strategic use of public funds under the requirements of sustainable development, the question arose once again as to how to curb the fall of institutional quality once criteria other than price are inserted into the decision-making in public purchasing. E-procurement has been repeatedly named as one of the most efficient tools to that effect and the present paper sets out to discover whether the implementation of e-procurement in a particular country per se entails also higher institutional quality, allowing for a wider implementation of green and sustainable procurement at the national, regional and municipal level without the fear of worsening the country’s institutional quality. By analyzing the implementation of e-procurement in Denmark, the Netherlands and in Portugal, this paper aims to verify the hypothesis that the implementation of e-procurement implies better institutions in terms of public purchasing. As such, the conclusions will be used in further research on the prerequisites for a successful implementation of green public procurement across the European Union. Design/methodology/approach Gathering data on institutional quality of three early e-procurement adopters (Denmark, the Netherlands and Portugal) allows for comparison of institutional quality pre- and post-e-procurement implementation. By using difference-in-differences comparison the paper seeks to answer the question how doesmandatory e-procurement influence institutional quality on the national level. Findings The paper finds that the reform is generally associated with a relatively stronger control of corruption in the Netherlands and Denmark, while a similar reform in Portugal failed to translate into a stronger control of corruption. Furthermore, while using the quality of regulation as a dependent variable, a positive and robust effect on the quality of regulation in Denmark was shown, while the quality of reputation in the Netherlands and Portugal declined in the post-reform period, with the drop in the quality of regulation in Portugal being considerably greater, a two-fold higher amount than the estimated drop in the Netherlands. The paper suggests that in spite of the same aims, the reform yielded substantially different or even opposing effects compared to Denmark. Research limitations/implications By examining three examples of early adopters, further research with broader impact is needed to deduce general implications for e-procurement implementation. Furthermore, implementation of e-procurement at the regional or local level can also yield distinct results. Social implications Understanding the actual impact of e-procurement on institutional quality is indispensable for further study on the matter. The present study argues that e-procurement needs to be accompanied by additional measures or variables to yield a positive impact on institutional quality in public procurement. Originality/value As to originality, the present paper uses a law and economics approach, originating or better said drawing motivation from green public procurement concerns, trying to provide an insight in terms of tools that can be used to eliminate concerns regarding institutional quality when implementing green public procurement practices.

Transformative Procurement Trends: Integrating Industry 4.0 Technologies for Enhanced Procurement Processes

“…Mélon et al [80] examine the impact of large-scale e-procurement adoption on institutional quality in Denmark, the Netherlands, and Portugal, comparing it with other countries. Using data from 108 countries between 1996 and 2017, the study employs a differences-in-differences policy analysis approach.…”

Quality Requirements of Electronic Procurement System for Enhancing its User Experiences (UX)

“…The use of e-procurement system is very important nowadays because of its beneficial impact on the productivity of organizations and individuals [4]. There are many benefits for the organizations involved, such as increased accuracy and quality of information, reduced transaction errors, payment of suppliers, and cost for purchasing [5]. However, despite all these advantages, there are still some problems faced by the users; the most common one is that suppliers believe using the e-procurement system is ineffective in promoting their products or services.…”

“…The quality requirement is defined as the conditions or specifications of the quality of products, services, or processes [10]. Some research has been conducted on UX for government systems [5], [11]. However, there is still a lack of studies regarding user experience when interacting with eprocurement systems [12].…”

“…On the other hand, there are also barriers faced by e-procurement users, especially SME users, such as prejudice, resource constraints, and lack of experience [21]. Therefore, according to Mélon and Spruk [5], if eprocurement is not implemented well, then the level of quality of an organization will be poor. Despite several studies that have been carried out on public procurement issues, there are still gaps that need to be explored in terms of important quality requirements of an e-procurement system.…”

Communication Activities on the Implementation of E-procurement in Indragiri Hulu Regency

“…Therefore, in its Implementation, physical infrastructure for information and communication technology is needed (Afolabi et al, 2019). Research in developed countries in the Netherlands and Portugal shows that the e-System is reliable for procuring goods and services (Mélon & Spruk, 2020). Other research shows that the Implementation of e-procurement must involve third-party companies so that the Implementation can run well.…”