The Effects of Decentralization on Efficiency in Public Procurement: Empirical Evidence for the Czech Republic

Abstract

The impact of decentralization on efficiency in the production of public goods and services has been described by the current scientific discourse in some detail. In this article, we focus on an analysis of the impact of the factor of decentralization as well as other selected factors on efficiency in public procurement. We view the term efficiency to be the ratio between the tendered and the estimated price, but also as procedural correctness and legality, as it is reflected in the administration of complaints, investigations, and findings regarding violations of the law by the supervising authority. We then describe the phases of bidding and post-bidding. For empirical research, we used linear regression and logistic regression. These methods are applied to data regarding public procurement for the years 2010-2014. The results show that, among the contracting authorities at the different levels of decentralization, there were statistically significant differences which we can explain through the different levels of accountability, economies of scale, as well as the qualifications of the workers of the contracting authority.