Network Analysis of Public and Municipal Procurement Markets

The network analysis is a relatively new research method in public procurement. Information exchanges, company affiliation and other types of relationships are reflected in the interaction among buyers and suppliers, creating the risks noncompetitive behavior. In these conditions, the network analysis allows to estimate the interaction of key suppliers, identify factors that reduce the procurement competitiveness, determine the effective network structure parameters. The aim of this paper is to apply network methods for analysis of local public procurement market. The master thesis includes 3 chapters. Chapter 1 outlines the principles for organizing the contract system in the Russian Federation, the stages and directions of its development, the importance of the approach to analyzing the public procurement market in terms of competitive behavior. The chapter includes a review of the scientific literature devoted to the analysis of non-competitive behavior and factors that lead to collusion. Chapter 2 describes the main elements and characteristics of network models, the concepts of centrality and other metrics used by network analysis. The chapter includes a review of the scientific literature on the network methods application for the analysis of public procurement. Chapter 3 presents the results of an empirical study of the cost-effectiveness of municipal purchases held in the period 2007-2017 in the Orekhovo-Zuevsky district of the Moscow region. The chapter includes network and regression models, which analyses the interrelation of the leader network metrics and the price efficiency of public procurements. The conclusion contains the main results of the study.