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Private enforcement of procurement rules: The heterogeneous effect of the EU remedies directive

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  • Chong, Eshien
  • Klien, Michael
  • Saussier, Stéphane

Abstract

This study examines the impact of the EU Remedies Directive on the prevalence of direct awards in public procurement. Strengthening bid protest mechanisms should, in theory, curb the use of direct awards by increasing the likelihood that aggrieved bidders challenge such decisions. Using a difference-in-differences approach, exploiting the staggered implementation of the directive across EU countries, we test this hypothesis using a large database of public procurement contracts. We find a strong deterrent effect for public buyers with a high initial propensity to use direct awards. For this group, the directive led to a reduction in direct awards exceeding 50 percentage points within two years of implementation. These results highlight the effectiveness of private enforcement mechanisms in shaping procurement behavior, yet indicate that such measures may also discourage the justified use of direct awards.

Suggested Citation

  • Chong, Eshien & Klien, Michael & Saussier, Stéphane, 2026. "Private enforcement of procurement rules: The heterogeneous effect of the EU remedies directive," International Review of Law and Economics, Elsevier, vol. 85(C).
    • Handle: RePEc:eee:irlaec:v:85:y:2026:i:c:s014481882500064x
    DOI: 10.1016/j.irle.2025.106308
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    JEL classification:

    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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