Public policy instruments for procurement: an empirical analysis

Kalyuzhnova, Y. ORCID: https://orcid.org/0000-0002-5781-8837, Azhgaliyeva, D. and Belitski, M. (2022) Public policy instruments for procurement: an empirical analysis. Technological Forecasting and Social Change, 176. 121472. ISSN 0040-1625 doi: 10.1016/j.techfore.2022.121472

Abstract/Summary

Policy instruments in procurement are widely used. While the efficiency of the local content policy requirements (LCRs) as one of such instruments has been questioned, it remains a powerful mechanism for the nationalgovernments of resource-rich countries. The aim of such LCRs is to extract additional benefits for citizens of these countries, beyond fiscal revenues and enhancing innovation. We analyse the relationship between the LCRs and local procurement using data from 1,326 contracts on extraction and exploration of subsoil in Kazakhstan over the period 2013-2016. We provide empirical evidence that LCRs in this case were not an effective tool in supporting procurement from local suppliers. We argue that firms would prefer to pay fines for non-compliance with LCRs on procurement of goods, works and services rather than use local suppliers. Our findings demonstrate that LCRs are an inefficient policy instrument and require further improvement in Kazakhstan. We offer policy implications for efficient LCRs and highlight the importance of choosing the optimal LCRs to enhance local procurement.

Item Type	Article
URI	https://reading-clone.eprints-hosting.org/id/eprint/102276
Identification Number/DOI	10.1016/j.techfore.2022.121472
Refereed	Yes
Divisions	Henley Business School > Digitalisation, Marketing and Entrepreneurship Henley Business School > Leadership, Organisations, Behaviour and Reputation
Publisher	Elsevier
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