Factors influencing adherence to public procurement principles and its impact on performance : evidence from Bangladesh

Abstract

Public procurement plays a crucial role in efficiently allocating public funds but is also vulnerable to corruption due to the involvement of large sums of money. Therefore, the government must adhere to procurement principles to achieve its regulatory, commercial, and socio-economic objectives. This study investigates the level of adherence by public entities to procurement principles in Bangladesh. The study uses Oliver's institutional theory model, to examine the factors influencing this adherence and its impact on public procurement performances. Furthermore, the study explores the mediating role of adherence to public procurement principles in the relationship between institutional factors and procurement performances. A self-administered questionnaire survey targeted public procurement officers in procurement agencies, yielding 398 valid responses. Descriptive analysis was conducted using SPSS, while partial least squares structural equation modelling was employed to test the hypotheses. The findings suggest a high adherence to Bangladeshi public procurement principles by the procurement agencies. Notably, the equality principle demonstrates the highest level of compliance, while the competition principle exhibits the lowest. Regarding factors influencing compliance, the results show that four out of eight institutional factors—dependence on rule setters, policy compatibility, professional discretion, and coercive power—significantly impact adherence to procurement principles. Additionally, the study reveals a positive relationship between adherence to procurement principles and various public procurement performances, including cost savings, improved quality, time efficiency, innovation, flexibility, and sustainability. Adherence to procurement principles is also identified as a significant mediator in the relationship between institutional factors and procurement performances. Specifically, it fully mediates the relationship between dependence on rule setters and coercive power and partially mediates the relationship between policy compatibility and professional discretion with procurement performances. The study contributes theoretically by operationalizing Oliver’s model to understand the influence of institutional factors on adherence to procurement principles and associated performances. This framework enhances our understanding of public procurement dynamics and their alignment with established principles. Additionally, the study offers valuable insights for policymakers and practitioners, highlighting areas for improvement and intervention. Ultimately, it aims to enhance the integrity, efficiency, and effectiveness of public procurement practices in Bangladesh, driving more effective transformations in the sector.