Home  Journals  Finance and Credit  42(618) - 2014 November

Transactions and corruption risks in government procurement

Available online: 3 November 2014

Subject Heading: PUBLIC FINANCE

JEL Classification: 

Pages: 20-26

The article underlines that surplus of bureaucratization of economic activity leads to depreciation of the significance of productive work, and it enhances economic transactional expenditures. However, until now, bureaucratization is not considered as a serious obstacle for the real economy development, production of goods and services for ensuring the population welfare of the country and its nonresidents. Moreover, the further complication of bureaucratic machinery makes staff more valuable, since that staff is associated with bureaucratic service itself. Though, in the conditions of global IT development, such bureaucratic arrangement is represented as the excessive and inefficient one. Complication of bureaucracy with negative effects, including covert service provided to the crime committing white-collar workers, and also creation of the corruption barriers complicating access to sources of public financing results from incompetence of staff at its work places. Namely, all that has caused rise in transaction price both during implementation of the State purchasing activity, and when rendering the State purchasing activity services that increased the expenditure portion of the State budget. The paper highlights that an analysis of bureaucratization with the "plus" sign and with the "minus" sign constitutes the most important direction of the Russian constructive economic thought aimed at countering corruption. The paper discusses the problems of an expediency of estimation of cost of the State purchasing activity procedure, discrimination on the issue of access to the budgetary financing of the different economic entities in the conditions of the corruption relations, and also restrictive nature of practical application of some bureaucratic procedures. The author comes to a conclusion on the need to avoid unreasonable transactional costs in Russia, and application of standard and alternative approaches to the further organization of the State purchasing activity in the country.

Keywords: State procurements, stationeries, corruption, rationing, price formation

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