Linking Government Procurement to Long-term Government Performance: A Theoretical Instrument with a Prescriptive Suggestion for China

Central and local governments in China are now expecting to significantly enlarge the spillover and indirect benefits of their public expenditures, particularly government-procurement expenditures, so as to satisfy provisions of the country’s recently released socioeconomic performance measurements in its guidelines, “Scientific Outlook on Development.” In this article, carefully selected U.S. policies and practical experiences that attempt to improve government performance with innovative procurement-policy design have been proposed to be transferred to China as a “software” technology and thus enhance the rationale of stimulating entrepreneurship at government expense. Furthermore, to shorten the gap between theory and practice, this article proposes a tentative solution for how the Chinese government can refine its current procurement system, namely by exploiting its widespread, government-sponsored business incubators to efficiently channel the distribution of procurement contracts in support of new and small-business development. Potential benefits stemming from this solution are demonstrated in this article with a case study that surveys the operation of the Mason Enterprise Center (MEC) and its Procurement Technical Assistance Program (PTAP).