Public Procurement Concept as A Path Dependence Result

Abstract

The rationale and conditions for transformation of a coordination mechanism in public procurement in Russia from market to redistribution, based on the quasi-market technology, are outlined. The authors view modernization of the economic framework of public procurement as an outcome of institutionalizing the rational conduct principles under the influence of such factors as public production conditions and path dependence. The paper describes transformation of the main elements of the machinery for financing public procurement associated with changing the institutional management structure towards support for the “best quality at an affordable price” principle. Alternatives of transaction managements in the financing system of supplying products for public needs are reviewed: from centralized planning in the USSR to the mixed economy in the today’s Russia. A comparative analysis based on the typical features of the market mechanism for transaction coordination justifies the quail-market nature of public procurement technologies in the Russian Federation. Arguments are given for procurement technology dynamics as returning to redistributive transaction coordination that facilitates transformation of public procurement from an economic-structure neutral into a proactive mechanism geared to form new economic orders. A sequence of tasks is given in order to execute the procurement concept in terms of institutional methodology as well as the prospects for developing a system of public procurement as a mechanism of proactive budgeting policy under bilateral economic sanctions that means de-liberalization of international economic relations. Public contractual system is a factor that is gradually restoring an ability to play a stabilizing and stimulating role in order to support the growth of national production and innovations by employing the taxpayer’s money to attain the national strategic development goals