The Public Procurement System: A Business Sector Perspective

This study empirically evaluates the public procurement system in Croatia, a transition country and a new EU member state. The research is based on empirical evidence collected by surveying a large sample of companies. It investigates how businesses as actors in the public procurement tenders evaluate the system and what their perceived and experienced views are on the various components of public procurement. The baseline model borrows from the literature by including companies’ characteristics in terms of company size and sector of business operations. Furthermore, it assumes that there are significant differences in attitudes and ratings among companies that have participated in public procurement as direct suppliers compared to companies that have been indirectly involved as subcontractors. The business opinion on the public procurement system procedures and regulations has been assessed as well, providing insights into the business perceptions on main public procurement principles: accountability, effectiveness, value for money, integrity and achieving the EU standards. Special attention has been dedicated to the assessment of corruption risks in public procurement. The evidence for Croatia reveals that in spite of the EU standards introduced there are still, at least from the point of view of companies, irregularities and lack of trust in the national public procurement system.