A Spatial Model of Competitive Bidding for Government Grants: Why Efficiency Gains Are Limited

Hugh Ward and Peter John
Additional contact information
Hugh Ward: University of Essex, hugh@essex.ac.uk
Peter John: University of Manchester, Peter.John@ manchester.ac.uk

Journal of Theoretical Politics, 2008, vol. 20, issue 1, 47-66

Abstract: With a view to improving public sector efficiency many governments now make public sector bodies competitively bid for funding. We model the bidding process as a game of spatial competition. Using Monte Carlo simulations we show that in efficient equilibria many bidding groups will not be under competitive pressure. The model suggests that this is because their ideal projects are inherently valuable for the funding agency and other groups cannot match this without departing so far from their ideal that they would rather not be successful. We test the hypothesis that competition will be limited largely to groups whose preferred projects are of medium quality on data from the UK Single Regeneration Budget. Using resubmitted bids to track the impact of competition, we find evidence consistent with this hypothesis.

Keywords: competition; bidding; public sector; grants (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/0951629807084039 (text/html)

Related works:
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:sae:jothpo:v:20:y:2008:i:1:p:47-66

DOI: 10.1177/0951629807084039

Access Statistics for this article

More articles in Journal of Theoretical Politics
Bibliographic data for series maintained by SAGE Publications ().