This study investigates compliance with SME-friendly policy in public procurement. Two research questions guide the investigation. The first is the extent to which policy is being complied with. The results, which are based on 349 public buyer survey responses, reveal compliance to be moderate; indicated by a mean score of 14.54 out of 22 on the compliance index. The second question concerns the impact of institutional forces on policy compliance. A predictive model informed by institutional theory is used to test these impacts. The model is significant and accounts for 27 per cent of the variance in policy compliance. Perceived consistency of institutional rules in public procurement, compatibility of SME-friendly policy with organisational goals, and organisational dependence on the state positively impact compliance. The constraining effect of SME-friendly policy on professional discretion has a negative effect. While not directly significant, social legitimacy, perceived diffusion of SME-friendly practices and coercion do indirectly influence policy compliance in interaction with procurement experience, procurement involvement and organisation size respectively.  \ud
A number of contributions arise from this study. Empirically, it provides among the first survey-based insights into what public buyers are doing to facilitate SMEs and the institutional factors that support or inhibit them in doing so. This is important as academic interest in SME-friendly procurement policies has not been matched by evidence on their implementation. Theoretically, it is novel in its application and operationalisation of institutional theory to explicate compliance behaviour in public procurement. Research on this topic has been largely a-theoretical to date. Methodologically, it is responsible for creating the first index of SME-friendly procurement practices. The study contributes to policy-practice by identifying several areas that can act as levers for the more effective translation of SME-friendly policy, including: policy monitoring and the professionalisation of public sector purchasing. The study alights on recommendations to take this line of inquiry forward. Relevant here is examining the effects of policy compliance on SMEs’ participation and success rates in contract competitions, undertaking cross-comparative research and triangulating research methods.\u