Using Proxy Indicators to Measure the Efficiency of the Public Procurement in the Republic of Kosovo

Drita Gjonbalaj1, Justina Shiroka-Pula2, Aferdita Berisha-Shaqiri3, Myslym Osmani4*
1The Procurement Office, Kosovo Agency for Privatization, Kosovo
2Economic Faculty, University of Prishtina, Kosovo
3Economic Faculty, University of Prishtina, Kosovo
4[1]Agricultural University of Tirana, Albania

 

Abstract
The main objective of this research is to assess the general efficiency level of public procurement system in the Republic of Kosovo. Other important objectives are investigating and identifying important determinants of the current level of efficiency for Kosovo. To achieve this, random data from 243 economic operators were collected and processed.  In terms of methods and tools, we use descriptive statistics and econometric modeling techniques. We propose 4 indirect variables of efficiency/inefficiency and build a set of econometric models to analyze the factors of efficiency/inefficiency. Results of the analysis show a very high level of inefficiency of funds used through public procurement. If we talk about efficiency in terms of the application of procurement principles, the inefficiency score is about 4.7, or the efficiency score is 0.3, which means an extremely low level of efficiency. If we speak in terms of capacities to implement procurement legislation, the inefficiency score is about 4, or the efficiency score is about 1, which again means a very low level of efficiency. Among major factors of inefficiency are lack of transparency and political intervention during the procurement process, as well as lack of knowledge by procurement staff and not application of electronic procurement. Bad Terms of References also seem to be a factor of inefficiency, but they might be related to political pressure and lack of knowledge and experience of the procurement staff.

Key Words: Economic operators; efficiency; Kosovo; legal factors; public procurement
JEL Codes: C12; C51; C83; C88; K42

 

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