A New Approach to the Evaluation of Public Procurement Efficiency among European Countries

Abstract

Public procurements have been high on the agenda of policy makers, decision makers, scholars, and other interested parties in Europe in the last few decades, as such procurements make up nearly one-fifth of Europe's total gross domestic product. Nevertheless, not many attempts have been made to measure the efficiency of public procurement systems and accordingly rank European countries. The most important measurement that highlights this issue is the Single Market Scoreboard for Public Procurements. However, this scoreboard is subject to bias and numerous omissions, which significantly decreases its operational usage and deteriorates the real efficiency of public procurements. This article aims to rank European countries in an unambiguous, objective, and impartial manner by using the Composite I-distance Indicator (CIDI) methodology. Instead of using biased weights for individual indicators, assigned by experts, the CIDI method creates new weights in an objective manner. The study analysed 30 European countries. The results of the study are, to some extent, different from current practice for public procurement efficiency measurement. The novel approach to ranking provides an opportunity to interested parties to improve the performance of their public procurements by reviewing them on a multidimensional basis.