Increasingly, public procurement is used as a lever to drive economic growth, and achieve
secondary/complementary policy objectives such as unlocking innovation, SMEs
participation and delivering sustainable outcomes. From an economic perspective, public
procurement is increasingly recognised as a lever for improving the efficiency and
effectiveness of public spending. For this reason, increasing the ‘productivity’ of
government spending has been seen as a worthwhile pursuit for governments. In a recent
study by McKinsey it was found that the global fiscal gap of USD 3.3 trillion could be
addressed by 2021 if public spending was better managed and followed the practices of
best performing countries. In the area of health care, the research found that by spending
existing funds more efficiently, healthy life expectancy would be increased by 1.4 years
(McKinsey & Company, 2017[1]).
As the complexity of public procurement activity and the associated expectations
increase, so does the difficulty of measuring its impact. These challenges are well
understood in Finland, where measuring and improving public procurement’s impact on
productivity will be a key enabler for improving economic performance.
This study provides an analysis of public procurement’s role in driving government
productivity, while acknowledging the difficulties of measuring the dynamics between
public procurement and economic performance. This is supplemented by an analysis of
efforts to measure public procurement activity through the development of indicators and
the collection of performance data. The study then assesses Finland’s attempts to measure
public procurement performance, while also providing concrete recommendations on how
to improve the procurement system’s efficiency and effectiveness.
Finally, a framework is proposed for understanding and measuring public procurement’s
contribution to the economy and national well-being more broadly. The framework is
then tested on the Finnish and Chilean procurement systems to validate its relevance.

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