Rules versus discretion in public procurement

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• dc.contributor.author Carril, Rodrigo
• dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa
• dc.date.accessioned 2024-11-14T10:09:28Z
• dc.date.available 2024-11-14T10:09:28Z
• dc.date.issued 2021-01-01
• dc.date.modified 2024-11-14T10:07:39Z
• dc.description.abstract I study the trade-off between rules and discretion in the context of US federal procurement. Below an arbitrary threshold amount, contracts can be awarded using procedures that are subject to significantly fewer rules and less oversight. Leveraging a change in the threshold value, I document three key empirical findings. First, there is substantial bunching of contracts at the threshold. Second, the added scrutiny introduced by rules distorts the award amount of some contracts, while discouraging other purchases altogether. Third, contracts subject to more scrutiny perform worse ex post. I propose and estimate a stylized model of public procurement that is consistent with these findings. I find that, at current levels, the benefits from waste prevention are modest relative to the size of the compliance costs introduced by regulation. I find that the optimal threshold is substantially higher than the current one, and that a proposed increase in the threshold will leave the government better off. The model highlights the key role of incentive misalignment in bureaucracies, and shows quantitatively how increased discretion can be optimal as misalignment is reduced.
• dc.format.mimetype application/pdf*
• dc.identifier https://econ-papers.upf.edu/ca/paper.php?id=1765
• dc.identifier.citation
• dc.identifier.uri http://hdl.handle.net/10230/68532
• dc.language.iso eng
• dc.relation.ispartofseries Economics and Business Working Papers Series; 1765
• dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
• dc.rights.accessRights info:eu-repo/semantics/openAccess
• dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
• dc.subject.keyword public procurement
• dc.subject.keyword bureaucracy
• dc.subject.keyword discretion
• dc.subject.keyword regulation
• dc.subject.keyword compliance
• dc.subject.keyword Labour, Public, Development and Health Economics
• dc.title Rules versus discretion in public procurement
• dc.title.alternative
• dc.type info:eu-repo/semantics/workingPaper