Deterring Kickbacks and Encouraging Entry in Public Procurement Markets : Evidence from Firm Surveys in 88 Developing Countries
There is relatively little systematic evidence on the links between procurement systems and outcomes such as competition and corruption levels. This paper adds to the evidence base, using data on almost 34,000 firms from the World Bank’s Enterprise...
| Main Authors: | , , |
|---|---|
| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2017
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/817871496169519447/Deterring-kickbacks-and-encouraging-entry-in-public-procurement-markets-evidence-from-firm-surveys-in-88-developing-countries http://hdl.handle.net/10986/26950 |
| id |
okr-10986-26950 |
|---|---|
| recordtype |
oai_dc |
| spelling |
okr-10986-269502021-06-08T14:42:46Z Deterring Kickbacks and Encouraging Entry in Public Procurement Markets : Evidence from Firm Surveys in 88 Developing Countries Knack, Stephen Biletska, Nataliya Kacker, Kanishka PUBLIC PROCUREMENT GOVERNANCE CORRUPTION BRIBERY KICKBACKS PEFA There is relatively little systematic evidence on the links between procurement systems and outcomes such as competition and corruption levels. This paper adds to the evidence base, using data on almost 34,000 firms from the World Bank’s Enterprise Surveys, in 88 countries that also have procurement systems data from Public Expenditure and Financial Accountability (PEFA) assessments. The analysis finds that in countries with more transparent procurement systems, where exceptions to open competition in tendering must be explicitly justified, firms are more likely to participate in public procurement markets. Moreover, firms report paying fewer and smaller kickbacks to officials in countries with more transparent procurement systems, effective and independent complaint mechanisms, and more effective external auditing systems. These findings—particularly on kickbacks—are robust to the inclusion of many controls and to a range of sensitivity tests. The study finds evidence that better procurement systems matter more for smaller firms’ participation in procurement markets and payment of kickbacks to obtain contracts, consistent with the view that information and transactions costs that are incurred in learning about bidding opportunities and fulfilling bidding requirements are more onerous for smaller firms. Falsification tests show that other, non-procurement indicators from the PEFA assessments are not associated with procurement outcomes, and that the PEFA procurement indicators are not strongly associated with other “governance”-related outcomes in firm surveys that are unrelated to procurement. 2017-06-05T20:57:48Z 2017-06-05T20:57:48Z 2017-05 Working Paper http://documents.worldbank.org/curated/en/817871496169519447/Deterring-kickbacks-and-encouraging-entry-in-public-procurement-markets-evidence-from-firm-surveys-in-88-developing-countries http://hdl.handle.net/10986/26950 English en_US Policy Research Working Paper;No. 8078 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
PUBLIC PROCUREMENT GOVERNANCE CORRUPTION BRIBERY KICKBACKS PEFA |
| spellingShingle |
PUBLIC PROCUREMENT GOVERNANCE CORRUPTION BRIBERY KICKBACKS PEFA Knack, Stephen Biletska, Nataliya Kacker, Kanishka Deterring Kickbacks and Encouraging Entry in Public Procurement Markets : Evidence from Firm Surveys in 88 Developing Countries |
| relation |
Policy Research Working Paper;No. 8078 |
| description |
There is relatively little systematic
evidence on the links between procurement systems and
outcomes such as competition and corruption levels. This
paper adds to the evidence base, using data on almost 34,000
firms from the World Bank’s Enterprise Surveys, in 88
countries that also have procurement systems data from
Public Expenditure and Financial Accountability (PEFA)
assessments. The analysis finds that in countries with more
transparent procurement systems, where exceptions to open
competition in tendering must be explicitly justified, firms
are more likely to participate in public procurement
markets. Moreover, firms report paying fewer and smaller
kickbacks to officials in countries with more transparent
procurement systems, effective and independent complaint
mechanisms, and more effective external auditing systems.
These findings—particularly on kickbacks—are robust to the
inclusion of many controls and to a range of sensitivity
tests. The study finds evidence that better procurement
systems matter more for smaller firms’ participation in
procurement markets and payment of kickbacks to obtain
contracts, consistent with the view that information and
transactions costs that are incurred in learning about
bidding opportunities and fulfilling bidding requirements
are more onerous for smaller firms. Falsification tests show
that other, non-procurement indicators from the PEFA
assessments are not associated with procurement outcomes,
and that the PEFA procurement indicators are not strongly
associated with other “governance”-related outcomes in firm
surveys that are unrelated to procurement. |
| format |
Working Paper |
| author |
Knack, Stephen Biletska, Nataliya Kacker, Kanishka |
| author_facet |
Knack, Stephen Biletska, Nataliya Kacker, Kanishka |
| author_sort |
Knack, Stephen |
| title |
Deterring Kickbacks and Encouraging Entry in Public Procurement Markets : Evidence from Firm Surveys in 88 Developing Countries |
| title_short |
Deterring Kickbacks and Encouraging Entry in Public Procurement Markets : Evidence from Firm Surveys in 88 Developing Countries |
| title_full |
Deterring Kickbacks and Encouraging Entry in Public Procurement Markets : Evidence from Firm Surveys in 88 Developing Countries |
| title_fullStr |
Deterring Kickbacks and Encouraging Entry in Public Procurement Markets : Evidence from Firm Surveys in 88 Developing Countries |
| title_full_unstemmed |
Deterring Kickbacks and Encouraging Entry in Public Procurement Markets : Evidence from Firm Surveys in 88 Developing Countries |
| title_sort |
deterring kickbacks and encouraging entry in public procurement markets : evidence from firm surveys in 88 developing countries |
| publisher |
World Bank, Washington, DC |
| publishDate |
2017 |
| url |
http://documents.worldbank.org/curated/en/817871496169519447/Deterring-kickbacks-and-encouraging-entry-in-public-procurement-markets-evidence-from-firm-surveys-in-88-developing-countries http://hdl.handle.net/10986/26950 |
| _version_ |
1764462964885159936 |