Institutions, corruption and transparency in effective healthcare public procurement: Evidence from Central and Eastern Europe

ABSTRACT

The benefits of good procurement practices in the healthcare sector are well known. Indeed, the importance of transparent, effective and efficient procurement of medical goods and services has gained momentum even more in light of the recent Covid-19 pandemic. However, there is little evidence of how traditional factors occurring on a procedure or contract level affect the effectiveness of public purchases when they take play in different institutional environments. This paper, therefore, contributes to this evidence using a large sample of public contracts in healthcare sectors awarded in 11 Central and East European Countries. The results support the previous evidence on the important role of transparency and open competitive bidding. Procedures with a prior call for competition and allowing for an unrestricted number of competitors lead to cost-effective contracts and higher direct savings. Effective government and lessening corruption have proven to facilitate better procurement outcomes, considering the financial aspects of awarded contracts. Moreover, the results on the effects of institutions contribute to the current academic debate by providing insight into the mechanism of obtaining cost-effectiveness and showing that strong institutions can play an important role in mitigating the adverse procurement outcomes related to less transparent and competition-restricting procedures.