Digital and AI-Enabled Public Procurement in Smart Cities: A Governance Efficiency Framework

Source abstract

This study examines the transformative role of digital and artificial intelligence (AI)-enabled public procurement systems in enhancing governance efficiency within smart city environments, with a specific focus on Yerevan, Armenia. As urban administrations increasingly adopt data-driven governance models and digital infrastructures, public procurement remains a critical yet underexplored domain for innovation in transition economies. Despite ongoing e-government reforms in Armenia, procurement systems continue to face challenges related to procedural inefficiencies, limited transparency, and institutional constraints. To address these challenges, the paper develops a Governance Efficiency Framework that integrates digitalization, AI capabilities, and multi-criteria decision-making principles to assess and optimize public procurement processes in urban settings. The framework incorporates key dimensions such as transparency, operational efficiency, accountability, and data integration, enabling a comprehensive evaluation of procurement performance. The empirical application of the framework to the case of Yerevan provides insights into the structural and technological determinants of procurement efficiency in a transition economy context. The findings indicate that while digitalization has contributed to improvements in transparency, significant limitations remain in efficiency and system integration. A scenario-based analysis further suggests that AI-enabled analytics, process automation, and digital procurement platforms have the potential to reduce administrative delays, enhance transparency, and support more strategic and evidence-based decision-making under assumed implementation conditions. By bridging the fields of public procurement, digital governance, and smart city research, this study contributes both theoretically and practically. It offers a structured and adaptable framework for policymakers and urban administrators seeking to modernize procurement systems and strengthen governance efficiency in evolving digital environments.