Centralised and Decentralised Public Procurement

Central and eastern European countries conduct public procurement on a highly decentralised basis, at the level of individual spending ministries, local authorities or other public bodies covered by the procurement law. However, in some cases, there may be advantages in mixing this approach with elements of centralisation, as is the case in many EU Member States. This paper reviews the experience of selected EU countries. The establishment in many central and eastern European countries of public procurement offices that are not responsible for actual purchasing but set national policy, organise training, draft legislation, etc., represents a great change from the earlier central monopoly purchasing systems. The purchasing function itself has been decentralised to hundreds or sometimes thousands of procuring entities. Many countries in the region see the new procurement model as part of the process of democratisation and do not want to replicate earlier institutions and mistakes. They are trying to move rapidly from one system to another. This paper sheds light on the various issues to be considered in deciding how procurement systems in these countries might evolve in the future. The target audience is primarily public procurement offices in Central and Eastern Europe, but the paper could also prove useful to other transition and developing countries that are in the process of modernising their procurement laws and systems.