Easing renegotiation rules in public procurement: Evidence from a policy reform

Kris De Jaegher, Michal Šoltés and Vítězslav Titl

Journal of Public Economics, 2025, vol. 248, issue C

Abstract: Public procurement contracts require frequent renegotiation. Exploiting a natural experiment induced by the implementation of an EU policy in the Czech Republic, we examine the effect of easing renegotiation rules on the outcomes of public procurement. We document that the policy decreased winning bids but did not change the final price, as post-award renegotiations offset the initial bid reductions. We find no evidence of a decline in the quality of the delivered procurement projects. We rationalize our findings using a stylized theoretical model.

Keywords: Public procurement; Renegotiation; Costs and quality (search for similar items in EconPapers)
JEL-codes: D44 H57 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:248:y:2025:i:c:s0047272725001434

DOI: 10.1016/j.jpubeco.2025.105445

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