Public Purchasing and Agency Theory

Living reference work entry



Public procurement and, within this, public purchasing constitutes paid contracts concluded by and between the contracting authority’s institution and the contractor’s institution for services, supplies, or works. Public purchasing is accompanied by an asymmetry of information which assumes the form of an agency relationship.


An asymmetry of information applies to transactional connections when one of the parties has greater knowledge on the subject matter of the transaction than the other, which results in a disturbance in the balance of power of the participants of the transaction and can lead to the dysfunction of the public procurement market. Information asymmetry involves having unequal information resources and, in itself, generates an imbalance of information that puts one of the parties to the transaction in a privileged position over the other, which is forced to...

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Authors and Affiliations

  1. 1.Institute of Administrative Studies, Faculty of Law, Administration and EconomicsUniversity of WroclawWroclawPoland