Public Procurement in Law and Practice

Erica Bosio, Simeon Djankov, Edward Glaeser and Andrei Shleifer

No 27188, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We examine a new data set of laws and practices governing public procurement, as well as procurement outcomes, in 187 countries. We measure regulation as restrictions on discretion of the procuring agents. We find that laws and practices are highly correlated with each other across countries, better practices are correlated with better outcomes, but laws themselves are not correlated with outcomes. To shed light on this puzzle, we present a model of procurement in which both regulation and public sector capacity determine the efficiency of procurement. In the model, regulation is effective in countries with low public sector capacity, and detrimental in countries with high public sector capacity because it inhibits the socially optimal exercise of discretion. We find evidence broadly consistent with this prediction: regulation of procurement improves outcomes, but only in countries with low public sector capacity.

JEL-codes: D73 H11 H57 K42 (search for similar items in EconPapers)
Date: 2020-05
New Economics Papers: this item is included in nep-law and nep-reg
Note: DEV PE
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Citations: View citations in EconPapers (35)

Published as Erica Bosio & Simeon Djankov & Edward Glaeser & Andrei Shleifer, 2022. "Public Procurement in Law and Practice," American Economic Review, vol 112(4), pages 1091-1117.

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Related works:
Journal Article: Public Procurement in Law and Practice (2022)
Working Paper: Public procurement in law and practice (2022)
Working Paper: Public procurement in law and practice (2020)
Working Paper: Public Procurement in Law and Practice (2020)
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