Publication Details
Abstract
Public procurement converts a substantial share of public expenditure into goods, works and services, yet its financial dimension — planning, pricing, settlement, control and incentives — is rarely treated as an integrated mechanism, particularly in transition economies. This paper develops a five-block conceptual framework of the financial mechanism of public procurement by synthesizing public finance, transaction cost, incentive and auction theories, and validates its institutional relevance through a documentary analysis of Uzbekistan's procurement reform of 2018–2026. The analysis of the regulatory architecture — the two-tier classification of contracting entities, method-specific value thresholds, the closed-loop clearing settlement model with a 3 per cent bid deposit and a 0.15 per cent operator fee, and the ten-day payment rule — demonstrates that procurement outcomes of industrial enterprises are shaped predominantly by financial design choices rather than by procedural rules alone. Four testable propositions are derived linking procurement method choice, advance financing, payment discipline and inter-block consistency to procurement efficiency. The framework provides a foundation for subsequent econometric research on aggregated panel data of industrial enterprises and informs the ongoing reform agenda of Uzbekistan's procurement system.