Paying over the odds at the end of the fiscal year: Evidence from Ukraine

End of fiscal year spending spikes have been found in a number of countries. These are considered a problem for policymakers in part because of the possibility of suppliers raising their prices to profit from the heightened... [ view full abstract ]

End of fiscal year spending spikes have been found in a number of countries. These are considered a problem for policymakers in part because of the possibility of suppliers raising their prices to profit from the heightened spending. This effect has not yet been established empirically however. This paper uses Ukrainian government procurement data to show that this is a substantial factor at the end of the fiscal year. It is estimated that the government pays on average 3% more at the end of the fiscal year due to higher bidding by suppliers.