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Highway to Economic Growth? Competition in Public Works Tenders in the Democratic Republic of Congo

Author

Listed:
  • Sergio Galletta

    () (Istituto di economia politica (IdEP), Facoltà di scienze economiche, Università della Svizzera italiana, Svizzera)

  • Mario Jametti

    () (Istituto di economia politica (IdEP), Facoltà di scienze economiche, Università della Svizzera italiana, Svizzera)

  • Agustin Redonda

    () (Istituto di economia politica (IdEP), Facoltà di scienze economiche, Università della Svizzera italiana, Svizzera)

Abstract

The Democratic Republic of Congo (DRC) is one of the poorest countries in the World. The construction sector will play an essential part to bring the country on the path of economic growth, and competition within the sector is crucial to achieve this goal. In this paper we analyze the effect of competition in public works tenders in the DRC. Using a unique and newly assembled database on tenders we find that the number of participating bidders and the observed spread of submitted bids both significantly reduce contract prices, confirming our prior that competitive pressure can enhance the overall performance of the sector.

Suggested Citation

  • Sergio Galletta & Mario Jametti & Agustin Redonda, 2012. "Highway to Economic Growth? Competition in Public Works Tenders in the Democratic Republic of Congo," Quaderni della facoltà di Scienze economiche dell'Università di Lugano 1208, USI Università della Svizzera italiana.
  • Handle: RePEc:lug:wpaper:1208
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    References listed on IDEAS

    as
    1. Jeremy Bulow & Paul Klemperer, 2002. "Prices and the Winner's Curse," RAND Journal of Economics, The RAND Corporation, vol. 33(1), pages 1-21, Spring.
    2. Bulow, Jeremy & Klemperer, Paul, 1996. "Auctions versus Negotiations," American Economic Review, American Economic Association, vol. 86(1), pages 180-194, March.
    3. Dakshina G. De Silva & Timothy Dunne & Georgia Kosmopoulou, 2003. "An Empirical Analysis of Entrant and Incumbent Bidding in Road Construction Auctions," Journal of Industrial Economics, Wiley Blackwell, vol. 51(3), pages 295-316, September.
    4. Eric Maskin & John Riley, 2000. "Asymmetric Auctions," Review of Economic Studies, Oxford University Press, vol. 67(3), pages 413-438.
    5. Porter, Robert H & Zona, J Douglas, 1993. "Detection of Bid Rigging in Procurement Auctions," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 518-538, June.
    6. Antonio Estache & Atsushi Iimi, 2010. "Bidder Asymmetry in Infrastructure Procurement: Are There any Fringe Bidders?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 36(2), pages 163-187, March.
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    More about this item

    Keywords

    Construction; competition; tenders; public works;

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L74 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Construction

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