How does the productivity of individual bureaucrats affect the overall efficiency of the public sector?
Public procurement refers to anything that the government purchases, from ink and chalk to pharmaceuticals. It represents a significant portion of any economy, comprising on average 14-15% of GDP. In this VoxDev talk, Jonah Hjort discusses a study of public procurement auctions in Russia that analyses quality-adjusted prices. Interestingly, the analysis shows that organisational structure and individual bureaucrats are equally important in explaining the variations in the final prices paid for similar goods. In fact, if the bottom quartile of bureaucrats operated as effectively as the top quartile, the Russian government would save $13 billion annually.