Organisations purchase goods and services for their business (operational) needs. To which extend does government policy affect these decisions? We design a quasi-experiment by collecting data on the usage of pro-environmental criteria in public procurement. In Russia, procurement is governed by two legislations: Federal Law 44-FZ, adopted in 2013 and replacing Federal Law 94-FZ of 2005, regulates purchases of goods and services by federal and regional governments, as well as municipalities, while Federal Law 223-FZ, adopted in 2011, regulates purchases by legal entities where the State has stakes over 50%, or which are funded from public sources.
Both pieces of legislation make similar provisions with regards to procurement criteria and procedures, in particular, allowing for a number of approaches of sustainable (pro-environmental) procurement. Yet, we make the point that entities subject to 44-FZ form part of the government system, and thus arguably have stronger incentives to follow principles of sustainable procurement, which falls in line with the environmental strategy of the government. At the same time, subjects of 223-FZ are "further away" from the government, and are not directly associated with the environmental strategy, although the latter is widely publicised. We thus use subjects to 223-FZ as a control group, and subjects 44-FZ as a treatment group, to establish differences in their decisions to use pro-environmental criteria in procurement.
An important result from this study is that organisations under 44-FZ are more likely to use sustainable criteria in procurement. Viewing the governmental system as one organisation, one may conclude that the principles and strategies of the whole organisation (as formulated in the environmental strategy of the Russian Federation) have an impact on decisions of subdivisions of this organisation (as represented by governmental and municipal authorities), even in the absence of explicit incentive mechanisms to do so. This has policy implications, as "sharing the values" and "feeling associated with the strategy" are important non-pecuniary drivers of pro-environmental behaviour that may work along with or instead of systems of incentives.