Unobserved Heterogeneity in Public Procurement Governance and Value for Money
The public procurement governance crisis in developing countries is typically triggered by unclear transparency and accountability, inadequate competitiveness procedures and weak legal frameworks. To address these challenges, unlikely other studies, we critically analyzed the effects’ sizes and permutation tests to uncover unobserved heterogeneity. The motives behind this paper are to ascertain the unobserved heterogeneity in public procurement governance and to identify existence classes with homogeneous behavior patterns. REBUS-PLS was used to measure and assess the unobserved heterogeneity. In that premises, the paper critically assessed the measurement and structural models and explicitly analyzed the goodness of fit (GoF) index, group quality index (GQI), effects' sizes and permutation tests. The six tested hypotheses were significant at the global model after accustoms the bootstrap. By contrast, the local models show better performance compared to the global model. The paper contributes by providing original empirical findings to the main streams of the public procurement governance with REBUS-PLS which is not a common approach. The study concludes that significant unobserved heterogeneity existed regarding transparency, accountability, competition, legal frameworks and value for money from a viewpoint of local government in Tanzania.
Anand, A. & Sossin, L. (2018) Independence and Accountability in Public and Private Governance, Canadian Public Administration, 61(1), pp. 15–35, 10.1111/capa.12268.
Assaker, G., Hallak, R. & O’Connor, P. (2018) Examining Heterogeneity Through REBUS- PLS-SEM : A Study of Human Capital and Firm Performance in Upscale Restaurants, Current Issues in Tourism, 23(2), pp. 1–16, https://doi.org/10.1080/13683500.2018.1490253.
Assaker, G. & Hallak, R. (2016) Research Noteon Response-Based Unit Segmentation (REBUS ) in Partial Least Squares -SEM, Tourism Analysis,21, pp. 661–668.
Atta-panin, J. (2015) Corporate Governance : A Panacea to Board Accountability and Value Creation, Journal of Business Management and Accounts,4(2), pp.41–47.
Awino, Z. B. & Marendi-getuno, P. N. (2014) Public Procurement Legal Framework Implementation Challenges and Organizational Performance, DBA Africa Management Review, 4(2), pp.103–117.
Bröchner, J., Camén, C., Eriksson, H. & Garvare, R. (2016) Quality and Legal Aspects in Public Care Procurement, The Total Quality Management Journal, 28(4), pp. 648 - 663, https://doi.org/10.1108/TQM-09-2014-0075.
Boehm, F. & Olaya, J. (2006) Corruption in Public Contracting Auctions: The Role of Transparency in Bidding Processes, Annals of Public and Cooperative Economics, 77(4), pp.431–452, https://doi.org/10.1111/j.1467-8292.2006.00314.x
Brinkerhoff, D. W. & Wetterberg, A. (2015) Gauging the Effects of Social Accountability on Services, Governance, and Citizen Empowerment, Public Administration Review, 76(2), pp. 274–286, https://doi.org/10.1111/puar.
Cohen, J. (1988) Statistical Power Analysis For Behavioral Sciences. Second Ed, Department of Pyschology (NewYork: Laurence Erlbaum Associate Publisher), pp. 411-414.
Chin., W. & Dibbern, J. (2010) A Permutation Based Procedure for Multi-Group PLS analysis: Results of Tests of Differences on Simulated Data and a Cross Cultural Analysis of the Sourcing of Information System Services between Germany and the USA. Chapt. 7 In: Vinzi, E. V., Chin, W. W., Henseler, J. & Wang, H. (eds) Partial Least Squares:Concepts, Methods and Application (New York : Springer Heidelberg Dordrecht press), pp.171-193, https://doi.org/10.1007/978-1-4614-8283-3.
Chin, W. W., Marcolin, B. & Newsted, P.(2003) A Partial Least Squares Latent Variable Modeling Approach for Measuring Interaction Effects: Results from a Monte Carlo Simulation Study and an Electronic-Mail Emotion/Adoption Study, Journal of Information Systems Research, 14(2), pp. 189-217. https://doi.org/10.1287/isre.188.8.131.5218.
Crawford, L. H., Lille, E. S. & Systems, H. (2009) Government and Governance : The Value of Project Management in the Public Sector, Project Management Journal, 40(1), pp. 73–87 , https://doi.org/10.1002/pmj.
Demirag, I. & Khadaroo, I. (2008) Accountability and Value for Money in Private Finance Initiative Contracts, Financial Accountability &Management, 24(4), pp.455–478.
Estache, A. & Bank, W. (2009) Joint Bidding , Governance and Public Procurement Costs : A case of Road Projects, Annals of Public and Cooperative Economics,80(3), pp.393–429, https://doi.org/10.1111/j.1467-8292.2009.00391.x.
Fairbanks, J., Plowman, K. D. & Rawlins, B. L. (2007) Transparency in Government Communication, Journal of Public Affairs, 7(1), pp.23–37, doi:10.1002/pa.
Fassott, G., Henseler, J. & Coelho, P. (2016) Testing Moderating Effects in PLS path models with Composite Variables, Journal of Indutrial Management and Data Sytem, 116(6), pp. 1887-1900, https://doi.org/10.1108/IMDS-06-2016-0248.
Filgueiras, F. (2016) Academic Paper Transparency and Accountability : Principles and Rules for the Construction of Publicity, Journal of Public Affairs, 16(2), pp.192–202, https://doi.org/10.1002/pa.
Fosso, S., Bhattacharya, M., Trinchera, L. & Ngai, E. W. (2017) Role of Intrinsic and Extrinsic Factors in User Social Media Acceptance within Workspace : Assessing Unobserved Heterogeneity, International Journal of Information Management, 37(2) pp.1–13, https://doi.org/10.1016/j.ijinfomgt.2016.11.004.
Galletta, S., Jammeti, M. & Redonda, A. (2015) Highway to Economic Growth: Competition in Public Works Tenders in the Democratic Republic of Congo, South African Journal of Economics, 83(2), pp.240–252,https://doi.org/10.1111/saje.12077.
Gaventa, J. & Mcgee, R. (2013) The impact of Transparency and Accountability Initiatives, Development Policy Review, 31(1) pp. 3- 31, https://doi.org/10.1111/dpr.12017.
Hair, F.J., Ringle, C. M. & Sarstedt, M. (2014) PLS-SEM: Indeed a Silver Bullet, Journal of Marketing Theory and Practice, 19(2), pp. 139-152.
Heald, D. (2018) Transparency-generated Trust : The Problematic Theorization of Public Audit, FinancialAccountability&Management, 34(4), pp. 1–19, https://doi.org/10.1111/faam.12175.
Henseler, J. & Sarstedt, M. (2013) Goodness-of-Fit Indices for Partial Least Squares Path Modeling, Computational Statistics,. 28(2), pp. 565–80, https://doi.org/10.1007/s00180-012-0317-1.
Hughes, A., Morrison, E. & Ruwanpura, K. N. (2018) Public sector Procurement and Ethical Trade: Governance and Social Responsibility in Some Hidden Global Supply Chains, Royal geographical society, 44(2), pp, 1–14, https://doi.org/10.1111/tran.12274.
Ibrahim, M., Bawole, N., Obuobisa-darko, T., Abubakar, A. & Sumnaya, A. (2017) The Legal Regime and the Compliance Façade In Public Procurement in Ghana, International Journal of Public Sector Management, 30(4), pp.1-42, https://doi.org/10.1108/IJPSM-09-2016-0156.
Imperial, M. T., Johnston, E., Pruett-Jones, M., Leong, K. & Thomsen, J. (2016) Sustaining The Useful Life of Network Governance: Life Cycles and Developmental Challenges, Journal of front ecological environment, 14(3), pp.455–478, https://doi.org/10.1002/fee.1249.
Israr, S., M. & Islam, A. (2006) Good Governance and Sustainability : A Case Study from Pakistan, International Journal of Health Planning and Management, 21(4), pp.313–325, https://doi.org/10.1002/hpm.852.
Janggu, T., Darus, F., Mohamed, M. & Sawani, Y. (2014) Does Good Corporate Governance Lead to Better Sustainability Reporting ? an Analysis Using Structural Equation Modelin, Procedia - Social and Behavioral Sciences, 145, pp.138–145, https://doi.org/10.1016/j.sbspro.2014.06.020.
Johansson, T. & Siverbo, S. (2018) The Relationship Between Supplier Control And Competition in Public Sector Outsourcing, Journal of Financial Accounting & Mananagement, 34(3), pp.1–20, https://doi.org/10.1111/faam.12153.
Juiz, C., Guerrero, C. & Lera, I. (2014) Implementing Good Governance Principles for The Public Sector in Information Technology Governance Frameworks, Open Journal of Accounting, 3(1), pp.9–27, https://doi.org/10.4236/ojacct.2014.31003.
Khalid, M., A. & Said, J. (2016) Empirical Assessment of Good Governance in the Public, Economics and Sociology, 9(4), pp. 289-304, https://doi.org/10.14254/2071-789X.2016/9-4/18.
Lamberti, G.(2015) Modeling with Heterogeneity (PhD Thesis) (Barcelona: University Polytechnic of Cataluña, Faculty of Mathematics and Statistics).
Lamberti, G., Aluja, T., B. & Sanchez, G. (2017) The Pathmox Approach for PLS Path Modeling: Discovering Which Constructs Differentiate Segments, Applied Stochastic Models in Business and Industry, 33(6), pp.1–16, https://doi.org/10.1002/asmb.2270.
Mahieu, S. & Yilmaz, S. (2010) Local Government Discretion and Accountability in Burkina Faso, Journal of public administration and development, 30, pp. 329–344, https://doi.org/10.1002/pad 344.
Mols, F. (2010) Harnessing Market Competition in PPP Procurement: The Importance Of Periodically Taking a Strategic View, The Australian Journal of Public Administration, 69(2), pp. 229–244, https://doi.org/10.1111/j.1467-8500.2010.00681.x.
National Audit Office (2018) The Report of the Controller and Auditor General (Dar Es Salaam: National Audit Office), available at: www.nao.go.tz/?wpfb_dl=253 (May 7, 2019).
Neupane, A., Soar, J. & Vaidya, K. (2014) An Empirical Evaluation of the Potential Public E-Procurement to Reduce Corruption, Journal of Information Systems, 18(2), pp.21–44, https://doi.org/10.3127/ajis.v18i2.780.
Noor, M., T. (2009) Institutional Dynamics of Governance and Corruption in Developing World (PhD Thesis), The Case of Pakistan Faculty of Economics and Social Studies (Heidelberg: Department of Political Science, South Asia Institute).
Pitelis, C., N. (2004) Shareholder Value and Sustainable Economic Performance, Corporate Governance,12(2), pp. 210–223, https://doi.org/10.1111/j.1467-8683.2004.00362.x.
Ringle, C. M., Sarstedt, M., Schlittgen, R. & Taylor, C. R. (2013) Partial Least Squares- Path Modeling(PLS-PM) and Evolutionary Segmentation, Journal of Business Research, 66(9), pp.1318–1324, https://doi.org/10.1016/j.jbusres.
Rothery, R.(2003) China’s Legal Framework for Public Procurement, Journal of Public Procurement, 3(3), pp.370-388, https://doi.org/10.1108/JOPP-03-03-2003-B003.
Sanchez, G., A. (2013) Detecting Classes with REBUS-PLS, In: Handbook on Partial Least Square-Path Modeling with R pp. 177-201, available at www.gastonsanchez.com (June 6, 2018).
Sanchez, G. A., Trinchera, L. & Russolillo, G. (2017) Response Base Unit Segmentation in R, Tools for Partial Least Squares Path Modeling (PLS-PM) in R Version Package, pp-28-30, available at https://github.com/gastonstat/plspm (June 13, 2019).
Sarstedt, M., Henseler, J. & Ringle, C. M. (2011) Multi-Group Analysis in Partial Least Squares ( PLS ) Path Modeling: Alternative Methods and Empirical Results, Advances in International Marketing, 22, pp. 195–218, https://doi.org/10.1108/S1474-7979(2011)0000022012.
Soudek, J. & Skuhrovec, J.(2016) Procurement Procedure, Competition and Final Unit Price: The Case of Commodities, Journal of Public Procurement, 16(1), pp.1-21, https://doi.org/10.1108/JOPP-16-01-2016-B001.
Tenenhaus, M., Amato, S. & Vinzi, E.V. (2000) A global Goodness of Fit index for PLS Structural (Napoli: University of Napoli, Department of Mathematics and Statistics), available at:
https://pdfs.semanticscholar.org/cfdb/0d4ec08d6eb4721787c795c092b36cb3805f.pdf (October 18, 2019).
Tenenhaus, M. & vinzi, E.V. (2005) Partial Leat Squares Regression , Partial Least Squares- path Modeling and Generalized Procrustean Analysis: A Combined Approach for Multiblock Analysis, Journal of Chemo metrics, 19, pp. 145–153, https://doi.org/10.1002/cem.917.
Trinchera, L. & Vinzi, E.V. (2006) Capturing Unobserved Heterogeneity in Partial Least Squares- Path Modeling, In: Proceedings of IFCS 2006 Conference (Ljubljana: Slovenia), pp. 25-30.
Trinchera, L. (2007) Unobserved Heterogeneity in Structural Equation Models: A New Approach to Latent Class Detection in Partial Least Squares- Path Modeling (PLS-PM), (Ph.D. Thesis) (Napoli: University of Napoli,Department of Mathematics and Statistics).
Trinchera, L. (2011) Assessment of Latent Class Detection in Partial Least Squares - Path Modeling (PLS-PM): a Simulation Study to Evaluate, (Berlin:Springer-Verlag Berlin Heidelberg press), pp.281-289, https://doi.org/10.1007/978-3-642-13312-1.
Ukwandu, D. C. & Jarbandhan, D. B. (2016) Exploring the Relationship Between Good Governance and Development in Sub-Saharan Africa Lessons from South America, African Journal of Public Affairs, 9(4), pp.20–37.
Venugopal, V. & Yilmaz, S. (2010) Decentralization in Tanzania : An Assessment of Local Government Discretion and Accountability, Journal public administration and development, 30, pp.215–231, doi:10.1002/pad.
Vinzi, E.V., Trinchera, L. & Amato, S. (2010) PLS Path Modeling: from foundations to Recent Developments and Open Issues for Model Assessment and Improvement. In: Vinzi, E. V., Chin, W. W., Henseler, J. & Wang, H. (eds) Partial Least Squares:Concepts, Methods and Application (New York: Springer Heidelberg Dordrecht press), pp. 42-79, https://10.1007/978-3-540-32827-8.
Vinzi, E. V., Ringle, C. M., Squillacciotti, S. & Trinchera, L. (2007) Experiments a Comparison of Alternative Methods by Computational, Response Based Segmentation in Partial Least Squares Path Modeling (PLS-PM). Capturing and Treating Unobserved Heterogeneity (Cergy-Pontoise: ESSEC Business School, Department of Information Systems & Decision Sciences (SID)), pp. 2-24.
Vinzi, E. V., Trinchera L., Squillacciotti S. & Tenenhaus M. (2008) REBUS-PLS: A Response-Based Procedure for Detecting Unit Segments in Partial Least Sqaures- Path Modeling (PLS-PM), Applied Stochastic Models in Business and Industry, 24, pp. 439-458.
Wan., R. (2014) Public Procurement of Innovation Policy: Competition Regulation, Market Structure and Dominant Design, Journal of Public Procurement, 14(4), pp. 473-494, https://doi.org/10.1108/JOPP-14-04-2014-B002.
Williams-elegbe, S. (2015) A Comparative Analysis of Public Procurement Reforms in Africa : Challenges and Prospects, Procurement Law Journal, 4, pp .80-90.
Zadawa, A. N., Hussin, A. A. & Osmadi, A. (2018) Mediating Effects of Enforcement on Public Procurement Guidelines Compliance Barriers and Cost Performance of Construction Projects in Nigerian Federal Universities: A Process Macro Approach, Journal of Construction in Developing Countries, 23(1), pp.81–102, https://doi. org/10.21315/jcdc2018.23.1.5.
It is a condition that the authors assign copyright or license the publication rights in their articles, including abstracts, to Institute for Local Self-Government Maribor. This enables us to ensure full copyright protection and to disseminate the article, and of course Journal, to the widest possible readership in print and electronic formats as appropriate. Authors retain many rights under the Institutes' right policies, which can be found at journal.lex-localis.press. Authors are themselves responsible for obtaining permission to reproduce copyright material from other sources.