Implicit incentives in green public procurement: Good intentions versus rigid regulations

Abstract

Governments promote pro-environmental behavior explicitly, through regulatory provisions, or implicitly, by setting general environmental objectives without explicit requirements. Shared values and commitment to government objectives supposedly help towards greener behavior. We argue that the lack of explicit guidance counteracts, especially if green options are perceived as conflicting with strict regulatory requirements on other issues. In Russian public procurement, organizations are subject to either a rigid procurement law, or a flexible law, or both; neither law formalizes environmental priorities or approaches. We design a survey on practices of green procurement, collecting 223 responses from the whole range of organizations subject to public procurement regulation. Results from probit regressions, robustified on further 800 responses from an additional survey and 250,000 official procurement records, show that regulatory rigidity hinders green practices. Federal authorities are more likely to apply environmental criteria than local governments, but this is rather due to the expertise of their staff than to their commitment to governmental objectives. Publicly funded institutions are less likely to adopt green procurement than state corporations. Caution and avoidance of unintended contraventions seem to impede adoption of green procurement. Provision of information, guidance and improved expertise can help overcome this effect.