Scaling behavior of public procurement activity.

António Curado,Bruno Damásio,Sara Encarnação,Cristian Candia,Flávio L Pinheiro

doi:10.1371/journal.pone.0260806

António Curado, Bruno Damásio + Show 3 more

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https://doi.org/10.1371/journal.pone.0260806

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Abstract

Public procurement refers to the purchase by public sector entities—such as government departments or local authorities—of Services, Goods, or Works. It accounts for a significant share of OECD countries’ expenditures. However, while governments are expected to execute them as efficiently as possible, there is a lack of methodologies for an adequate comparison of procurement activity between institutions at different scales, which represents a challenge for policymakers and academics. Here, we propose using methods borrowed from urban scaling laws literature to study public procurement activity among 278 Portuguese municipalities between 2011 and 2018. We find that public procurement expenditure scales sublinearly with population size, indicating an economy of scale for public spending as cities increase their population size. Moreover, when looking at the municipal Scale-Adjusted Indicators (the deviations from the scaling law) by contract categories—Works, Goods, and Services—we are able to identify a richer local characterisation of municipalities based on the similarity of procurement activity. These results make up a framework for quantitatively studying local public expenditure by enabling policymakers a more appropriate foundation for comparative analysis.

Highlights

Public procurement contracts—defined by the OECD as the purchase by governments and state-owned enterprises of goods and services [1]—are an essential public sector instrument allowing policymakers to push-forward inclusive socio-economic standards [2], promote innovation and economic growth [3,4,5] policies effectively
We propose using methods borrowed from urban scaling laws literature, which are rooted in statistical physics and complexity sciences, to characterize municipal public procurement activity
The obtained scaling coefficients are inline with previous findings in the urban scaling laws literature, supporting the choice of analysis at the municipality level

Summary

Introduction

Public procurement contracts—defined by the OECD as the purchase by governments and state-owned enterprises of goods and services [1]—are an essential public sector instrument allowing policymakers to push-forward inclusive socio-economic standards [2], promote innovation and economic growth [3,4,5] policies effectively. Among OECD countries, public procurement weighs, on average, 29% of all governmental expenditures [2] (14% among EU countries [6]) and 12% of global OECD countries GDP.

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