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

Author

Listed:
  • Eshien Chong
  • Michael Klien

    (Austrian Institute of Economic Reseach (WIFO))

  • Stéphane Saussier

    (LAB IAE Paris - Sorbonne - IAE Paris - Sorbonne Business School)

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.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Eshien Chong & Michael Klien & Stéphane Saussier, 2026. "Private enforcement of procurement rules: The heterogeneous effect of the EU remedies directive," Post-Print hal-05379106, HAL.
    • Handle: RePEc:hal:journl:hal-05379106
    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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