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Effects of Transparency in Procurement Practices on Government Expenditure: A Case Study of Municipal Public Works

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  • Hiroshi Ohashi

Abstract

This paper examines the e?ect of improved transparency in the bidder quali.cation process, using the experience based on a case study of municipal public work auctions. It reveals that improved transparency reduces procurement cost by a maximum of three percent. This .nding is robust to the concerns of endogeneity, sample selectivity, and distributional assumptions. The bidding-function estimates, combined with features of Japanese procurement system, imply that the improved transparency limits abuse of auctioneer.s discretion, and thus weakens the stability of collusion among bidders.
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  • Hiroshi Ohashi, 2009. "Effects of Transparency in Procurement Practices on Government Expenditure: A Case Study of Municipal Public Works," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 34(3), pages 267-285, May.
    • Handle: RePEc:kap:revind:v:34:y:2009:i:3:p:267-285
    DOI: 10.1007/s11151-009-9208-1
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    More about this item

    Keywords

    Public procurement; Transparency; Discretion; Difference-in-differences; F14; H57; L13;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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