Public Procurement in Law and Practice

Abstract

We examine a new dataset of public procurement laws, practice, and outcomes in 187 countries. We measure regulation as restrictions on the discretion of the procuring entities. We find that laws and practice are highly correlated with each other across countries, and better practice is correlated with better outcomes, but laws themselves are not correlated with outcomes. A closer look shows that stricter laws correlate with improved outcomes, but only in countries with low public sector capacity. We present a model of procurement in which both regulatory rules and public sector capacity determine procurement outcomes. In the model, regulation is effective in countries with low public sector capacity, but not in countries with high capacity because it inhibits the socially optimal exercise of discretion to exclude low quality bidders. (JEL D73, H11, H57, K12, K42, O17)

Corruption, accountability, and discretion of procurement officials: An analysis of selection Preferences for Performance-based Evaluation Criteria (PBEC) in PPP procurement

“…Discussions of discretion in public procurement have long been central to the development of procurement law [36,37]. Traditional procurement law restricts the discretion, but the fear of…”

More Information, Lower Price? Access Market-based Reference Prices and Gains in Public Procurement Efficiency

“…Our findings show that technological interventions can improve procurement outcomes by providing actionable information for frontline officers at a relatively low cost and under limited maintenance investment. Such a result is especially important given the recent empirical evidence that regulation and enforcement do not necessarily translate into better practices and purchasing prices (Gerardino et al, 2017;Bucciol et al, 2020;Bosio et al, 2022), and that bureaucratic competence is a major driver of procurement efficiency (Decarolis et al, 2020a;Best et al, 2022). Therefore, more cost-effective ways of combating passive waste (Bandiera et al, 2009) are needed to improve the performance of governments in public procurement.…”

Donor Contracting Conditions and Public Procurement: Causal Evidence from Kenyan Electrification

“…Government agencies often rely on private firms to supply many goods and services: public procurement spending amounts to 12% of global GDP (Bosio et al 2022). Procurement regulations can improve project outcomes but may also introduce bureaucratic inefficiencies or inhibit useful regulatory discretion (Williamson 1999;Hart et al 1997;Bosio et al 2022).…”

“…Government agencies often rely on private firms to supply many goods and services: public procurement spending amounts to 12% of global GDP (Bosio et al 2022). Procurement regulations can improve project outcomes but may also introduce bureaucratic inefficiencies or inhibit useful regulatory discretion (Williamson 1999;Hart et al 1997;Bosio et al 2022). Multilateral agencies face a similar procurement problem to governments: for instance, between 2000 and 2022 the World Bank financed more than 311,000 contracts with private sector contractors for the procurement of more than $185 billion in works, goods, or services for more than 21,000 projects, many of them in infrastructure construction.…”