When can lotteries improve public procurement processes?

Antonio Estache, Renaud Foucart and Tomas Serebrisky

No 12484, IDB Publications (Working Papers) from Inter-American Development Bank

Abstract: We study the potential benefits of adding a lottery component to cut the main risks associated with standard negotiated and rule-based auction procurement procedures. We show that adopting a two stage approach in which bureaucrats first negotiate with a small number of bidders to assess their eligibility and, next, rely on a lottery to award the contract reduces corruption risks often observed in negotiated procedures. For rule-based procedures, we show that a “third-price lottery” in which the two highest bidders are selected with equal probability and the project is contracted at a price corresponding to the third highest bid can reduce limited liability, renegotiation, bid rigging and collusion risks.

Keywords: rules; discretion; lotteries (search for similar items in EconPapers)
JEL-codes: D44 D73 H57 (search for similar items in EconPapers)
Date: 2022-10
New Economics Papers: this item is included in nep-cta, nep-mic, nep-ppm and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://publications.iadb.org/publications/english ... rement-processes.pdf (application/pdf)

Related works:
Working Paper: When can Lotteries improve Public Procurement Processes? (2022)
Working Paper: When can lotteries improve public procurement processes? (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:idb:brikps:12484

DOI: 10.18235/0004522

Access Statistics for this paper

More papers in IDB Publications (Working Papers) from Inter-American Development Bank Contact information at EDIRC.
Bibliographic data for series maintained by Felipe Herrera Library ().