Analysis of Factors of Overpricing in Public Procurement: A Study for Low-performing EU Countries

ABSTRACT

The paper deals with the issue of overpricing of public procurement in low-performing EU countries. It examines a uniquely large sample of public procurement in 11 Central and Eastern European countries. Hierarchical regression is used to analyze the factors that influence public contract. Our results indicate that institutional factors have a greater impact on overpricing than individual decisions by the contracting authority. Our analysis for low-performing EU countries provides interesting results and also draws attention to behavior that is not typical of the better established and more advanced EU countries. Our results are particularly important for public policy in each country, as they show the direction of regulatory action in the field of public procurement. The results introduce a debate on the appropriateness of “one size fits all” regulations within the EU.