Transparency and budget savings in public procurement: evidence from Thailand’s Infrastructure Transparency Initiative (CoST)

Tippatrai Saelawong, Torplus Yomnak, Thanee Chaiwat, Siwat Poopunpanich and Charoen Sutuktis

Journal of Financial Crime, 2023, vol. 31, issue 6, 1407-1419

Abstract: Purpose - This study evaluates the effect of transparency measures on public procurement efficiency, focusing on Thailand’s Infrastructure Transparency Initiative (CoST). This study aims to understand its impact on the country’s public infrastructure procurement practices. Design/methodology/approach - This paper analyses Thailand’s government construction procurement data, focusing on budgetary savings and CoST process participation. Budgetary savings are this study dependent variable, while the main intervention variable is the adoption of the CoST data disclosure standard. This study uses multiple linear regression, fixed-effects model and propensity score matching with the logit model for a comprehensive analysis. Findings - This study shows that using the CoST data disclosure leads to notable budget savings in Thai public construction procurement. With CoST’s introduction, the savings rose by Baht 9.6m, and even with added controls, the savings remained significant at around Baht 3.3m. The savings consistently stay near 5% across different models. The propensity score matching method confirms these results, consistent with factors such as open bidding and agency categorisation. Research limitations/implications - This study might not capture all benefits, especially non-financial ones. Thailand’s unique context and potential biases in data sources also need consideration. Practical implications - CoST evidence backs Thailand’s procurement transparency. This study recommends broadening CoST, streamlining online platforms and promoting digital public engagement. Training stakeholders and partnering with state-owned enterprises and local agencies is vital to align with CoST and mitigate risks. Originality/value - This study shows a clear link between transparency from information disclosure and budget efficiency in public procurement, using data from Thailand. It highlights the potential of transparency measures in developing countries.

Keywords: Transparency; Public procurement; Public infrastructure; Procurement efficiency (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jfcpps:jfc-10-2023-0282

DOI: 10.1108/JFC-10-2023-0282

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