Abstract
This evidence paper seeks to clearly outline the benefits of open competition in public procurement, review the policies fostering it and measuring competitive outcomes in carefully selected comparable markets across a wide array of countries. Our review of evidence regarding benefits of and policies for open competition is based on high-quality academic and policy offering reliable quantitative estimates. Our competition assessment is based on behavioral micro-data rather than expert scores or perceptions and only compares like with like, that is markets for standardized products and services. We find that open competition can contribute both to efficiency and anti-corruption, with many estimates of positive impacts of competition, i.e. a few additional bidders, ranging between 10 and 20% price reduction. Among the reviewed policy interventions fostering open competition in public procurement, we find that introducing e-procurement and widening advertisement of tenders are among the most impactful. While our analysis is preliminary, we find that the narrow comparisons of very carefully defined markets and the use of output and outcome-level indicators of competition yield considerable analytical precision. The measurement framework reveals considerable variation over time and across countries with some surprising good and bad performances.
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Citation
Adam, I., H. Sanchez, A. and Fazekas, M. (2021). Global Public Procurement Open Competition Index. GTI-WP/2021:02, Budapest: Government Transparency Institute.