Enhancing Competition in Public Procurement for Sustained Growth: Applying a Double Selection Model to Road Procurement Auctions
Limited competition has been a serious concern in infrastructure procurement. Importantly, however, there are normally a number of potential bidders initially showing interest in proposed projects. This paper focuses on tackling the question why these initially interested bidders fade out. An empirical problem is that no bids of fading-out firms are observable. They could decide not to enter the process at the beginning of the tendering or may be technically disqualified at any point in the selection process. The paper applies the double selection model to procurement data from road development projects in developing countries and shows that competition ends up restricted, because bidders are self-selective and auctioneers also tend to limit participation depending on the size of contracts.Limited competition would likely lead to high infrastructure procurement costs, threatening fiscal sustainability and economic growth.
Digital Object Identifier (DOI): doi.org/10.5281/zenodo.1061527Procedia APA BibTeX Chicago EndNote Harvard JSON MLA RIS XML ISO 690 PDF Downloads 1084
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