Investigating Compliance with SME-friendly Procurement Policy

This study investigates compliance with SME-friendly policy in public procurement. Two research questions guide the investigation. The first is the extent to which policy is being complied with. The results, which are based on 349 public buyer survey responses, reveal compliance to be moderate; indicated by a mean score of 14.54 out of 22 on the compliance index. The second question concerns the impact of institutional forces on policy compliance. A predictive model informed by institutional theory is used to test these impacts. The model is significant and accounts for 27 per cent of the variance in policy compliance. Perceived consistency of institutional rules in public procurement, compatibility of SME-friendly policy with organisational goals, and organisational dependence on the state positively impact compliance. The constraining effect of SME-friendly policy on professional discretion has a negative effect. While not directly significant, social legitimacy, perceived diffusion of SME-friendly practices and coercion do indirectly influence policy compliance in interaction with procurement experience, procurement involvement and organisation size respectively.