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Bunching below thresholds to manipulate public procurement

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  • Bedri Kamil Onur Tas

    (College of Economics and Political Science)

Abstract

Manipulative authorities can bunch tenders just below thresholds to implement noncompetitive procurement practices. I use regression discontinuity manipulation tests to identify the bunching manipulation scheme. I investigate the European Union public procurement data set that covers more than two million contracts. The results show that 10–13% of the examined authorities exhibit a high probability of bunching. These authorities are less likely to employ competitive procurement procedures. Local firms are more likely to win contracts from a bunching authority. The probability that the same firm wins contracts repeatedly is high when an authority has high bunching probability. Empirical results suggest that policy makers can effectively employ regression discontinuity manipulation tests to determine manipulative authorities.

Suggested Citation

  • Bedri Kamil Onur Tas, 2023. "Bunching below thresholds to manipulate public procurement," Empirical Economics, Springer, vol. 64(1), pages 303-319, January.
    • Handle: RePEc:spr:empeco:v:64:y:2023:i:1:d:10.1007_s00181-022-02250-4
    DOI: 10.1007/s00181-022-02250-4
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    References listed on IDEAS

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    More about this item

    Keywords

    Public procurement; Manipulation; Competition; European union;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement

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