Public Procurement in Law and Practice
Simeon Djankov (),
Edward Glaeser () and
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Erica Bosio: World Bank
No WP20-14, Working Paper Series from Peterson Institute for International Economics
In this paper we examine a new dataset of laws and practices governing public procurement, as well as procurement outcomes, in 187 countries. We measure regulation as restrictions on the discretion of the procuring agents. We find that laws and practices are highly correlated with each other across countries, and 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.
Keywords: Procurement; Law; Practice; Corruption (search for similar items in EconPapers)
JEL-codes: H40 H57 K42 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-law and nep-reg
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Working Paper: Public Procurement in Law and Practice (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:iie:wpaper:wp20-14
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