Conference Paper
Discretion and Public Procurement Outcomes: Law, Practice and Government Effectiveness
No.
ERF29AC_54
Publisher
ERF
Date
May, 2023
Detailed data on public procurement contract awards in 33 countries reported in the EU Tenders Electronic Daily (TED) dataset are used to assess the relationship between government procurement regulation and procurement practice regarding the exercise of discretion by authorities. We find that the PP law pertaining to discretion is not associated with average procurement costs but that more restrictive practice towards exercise of discretion is associated with higher contract prices. This suggests more restrictive PP practices may prevent public authorities from using discretion to eliminate low-quality bidders. The association between PP practice score and higher contract prices is stronger in countries with above average government effectiveness. More restrictive PP practice is also associated with higher probabilities that foreign or small and medium enterprises will win a PP contract. Our empirical results suggest that MENA countries with low government effectiveness and PP practices that permit more discretion are likely to benefit more from restricting the potential for procuring entities to exercise discretion in the allocation of procurement contracts.
Senior Associates
Bernard Hoekman
Professor and Director, Global Economics, Robert Schuman...
Research Fellows
Bedri Kamil Onur Tas
Associate Professor of Economics, College of Economics...