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Joint bidding, governance and public procurement costs: A case of road projects

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  • Antonio Estache
  • A. Iimi

Abstract

To utilize public resources efficiently, it is important to take advantage of competition in public procurement auctions to the maximum extent. Joint bidding is a common practice that potentially facilitates competition. By pooling financial and experiential resources, more firms are expected to enter the market, but it will also directly reduce competition if more than one bidder who is solely qualified makes a coalition.In theory joint bidding may or may not be beneficial to auctioneers, depending on the model. The paper empirically examines the impacts of joint bidding on firms' entry as well as bidding behaviour, using data on public road projects in developing countries. It shows that coalitional bids, in particular by local firms, would be competitive, but foreign joint ventures would undermine competition. It is also found that good governance can encourage firms' entry into the tendering and facilitate joint bidding practices.

Suggested Citation

  • Antonio Estache & A. Iimi, 2009. "Joint bidding, governance and public procurement costs: A case of road projects," ULB Institutional Repository 2013/43906, ULB -- Universite Libre de Bruxelles.
  • Handle: RePEc:ulb:ulbeco:2013/43906 Note: FLWIN
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    Cited by:

    1. 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.
    2. Collier,Paul & Kirchberger,Martina & Söderbom,Måns, 2015. "The cost of road infrastructure in low and middle income countries," Policy Research Working Paper Series 7408, The World Bank.
    3. Claudia N. Berg & Uwe Deichmann & Yishen Liu & Harris Selod, 2017. "Transport Policies and Development," Journal of Development Studies, Taylor & Francis Journals, vol. 53(4), pages 465-480, April.

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