Flexible Strategies for Centralized Public Procurement

Abstract

When designing a national public procurement system, the degree of centralization (or, equivalently, the degree of demand aggregation) is one of the most crucial as well as puzzling policy choices. Centralized procurement has been traditionally considered as an instrument to reduce public spending. In more recent years, though, and particularly after the 2008 global financial turmoil, a growing interest has arisen among both policy makers and researchers in government procurement as a lever to pursue broader policy goals, such as competitive markets structure, sustainable development and innovation. This paper reviews and discusses several issues related both to the rationales and to the practical implementation of centralized procurement strategies, with a particular focus on the procurement of goods and services.