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Public procurement design: Lessons from the private sector

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  • Tadelis, Steven

Abstract

Public procurement regulations put constraints on the contracts and award mechanisms that public procurement agencies can use. These constraints are not present in the private sector, and recent studies suggest that the added flexibility in private sector procurement offers efficiency advantages. This paper offers a short progress report of these recent studies, and argues for the need to enhance the tools that are currently at the disposal of public sector procurement offices.

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Bibliographic Info

Article provided by Elsevier in its journal International Journal of Industrial Organization.

Volume (Year): 30 (2012)
Issue (Month): 3 ()
Pages: 297-302

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Handle: RePEc:eee:indorg:v:30:y:2012:i:3:p:297-302

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Web page: http://www.elsevier.com/locate/inca/505551

Related research

Keywords: Public procurement; Fixed-price contracts; Cost-plus contracts; Auctions; Negotiations; Adaptation costs;

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References

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  1. Abhijit V. Banerjee & Esther Duflo, 2000. "Reputation Effects And The Limits Of Contracting: A Study Of The Indian Software Industry," The Quarterly Journal of Economics, MIT Press, vol. 115(3), pages 989-1017, August.
  2. Jean-Jacques Laffont & Jean Tirole, 1993. "A Theory of Incentives in Procurement and Regulation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121743, December.
  3. Bajari, Patrick & Tadelis, Steven, 2001. "Incentives versus Transaction Costs: A Theory of Procurement Contracts," RAND Journal of Economics, The RAND Corporation, vol. 32(3), pages 387-407, Autumn.
  4. Steven Tadelis, 2002. "Complexity, Flexibility, and the Make-or-Buy Decision," American Economic Review, American Economic Association, vol. 92(2), pages 433-437, May.
  5. Patrick Bajari & Robert S. McMillan & Steve Tadelis, 2003. "Auctions Versus Negotiations in Procurement: An Empirical Analysis," NBER Working Papers 9757, National Bureau of Economic Research, Inc.
  6. Ye, Lixin, 2007. "Indicative bidding and a theory of two-stage auctions," Games and Economic Behavior, Elsevier, vol. 58(1), pages 181-207, January.
  7. Eshien Chong & Freddy Huet & Stéphane Saussier & Faye Steiner, 2006. "Public-Private Partnerships and Prices: Evidence from Water Distribution in France," Review of Industrial Organization, Springer, vol. 29(1), pages 149-169, September.
  8. Jonathan Levin & Steven Tadelis, 2007. "Contracting for Government Services: Theory and Evidence from U.S. Cities," NBER Working Papers 13350, National Bureau of Economic Research, Inc.
  9. Victor P. Goldberg, 1977. "Competitive Bidding and the Production of Precontract Information," Bell Journal of Economics, The RAND Corporation, vol. 8(1), pages 250-261, Spring.
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Citations

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Cited by:
  1. Nilsson, Jan-Eric, 2012. "Procurement and contract design in the construction industry: … not one size fits all," Working papers in Transport Economics 2012:26, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
  2. Andrey Yakovlev & Andrey Tkachenko & Olga Demidova & Olga Balaeva, 2013. "An impact of different regulatory regimes on the effectiveness of public procurement," HSE Working papers WP BRP 08/PA/2013, National Research University Higher School of Economics.

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