11  Procurement

The procurement indicator is defined as: the extent to which the government’s procurement processes are efficient, competitive, fair and pursues value for money. According to the World Trade Organisation (2015) “government procurement accounts for an average of 15 percent of more of a country’s GDP”. As procurement makes up such a large proportion of countries’ GDP, it must be managed appropriately. Effective procurement management can streamline contracts and reduce outgoings, contributing to improved efficiencies in civil services. On public procurement, the World Bank (2016) states it “is a key variable in determining development outcomes and, when carried out in an efficient and transparent manner, it can play a strategic role in delivering more effective public services. It can also act as a powerful tool for development with profoundly positive repercussions for both good governance and more rapid and inclusive growth”.

The procurement indicator is comprised of six metrics. This indicator is new for the 2019 edition of the index, and was not included in the 2017 Pilot edition. The sources for the procurement indicator are:

Table 11.1: Composition of the procurement indicator
Metric Source Type Public sector proxy Data transformation Weighting within indicator Definition of the source metric (e.g. question wording)
In theme (A) Theme (B) Total (C=A*B)
Procurement system
E-procurement functionality [new] OECD Government assessment No Composite 33.3% 50.0% 16.7% Are the following functionalities provided by the e-procurement system?
Roles of the central purchasing body [new] OECD Government assessment No Composite 33.3% 50.0% 16.7% Please identify the roles of central purchasing bodies in your country
Support for SMEs [new] OECD Government assessment No Composite 33.3% 50.0% 16.7% Please identify the approaches in place in your country to support participation in small and medium-sized enterprises (SMEs) in public procurement for central government.
Procurement in practice
Administrative effectiveness [new] OT Analysis of published data Yes None 33.3% 50.0% 16.7% Made up of indicators: joint or centralised procurement, use of framework agreements, use of WTO framework, English as foreign language, Discrepancies between call for tender and contract award notices.
Transparency of procurment [new] OT Analysis of published data Yes None 33.3% 50.0% 16.7% Share of non-missing key fields from tenders.
Integrity in procurmenet [new] OT Analysis of published data Yes None 33.3% 50.0% 16.7% Made up of indicators: single bidder contract, call for tenders publication, procedure type, length of advertisement period, length of decision period, new company, tax haven
Tables 3.9.A & 3.9.B in the original 2019 publication

11.1 Imputation of missing data

Two of the 38 countries selected for the 2019 edition of InCiSE have completely missing data for the procurement indicator.

The procurement indicator is a new indicator for the 2019 edition, and there are no easily identifiable external predictors (e.g. tertiary education for Capabilities or the UN’s E-Government survey for Digital Services), instead the correlations between the procurement metrics and the other metrics in the InCiSE model have been analysed to identify potential predictors. This analysis has selected three metrics: the use of data in HR administration from the HR management indicator; the publicised laws metric from the openness indicator; and, the collection cost metric from the tax administration indicator.

11.2 Changes from the 2017 Pilot

The procurement indicator is a new indicator and was not covered by the 2017 Pilot edition of the InCiSE Index.

Cross-referencing note

This chapter was presented as section 3.9 in the original 2019 publication.