Abstract: Public procurement is one of the most
important areas in the public sector that introduces a possibility for a
corruption. Due to the volume of the funds that are
allocated through this institution (in the EU countries it is between 10
– 15% of GDP), it has very serious implications for the efficiency of
public expenditures and the overall economic efficiency as
well. Indicators that are usually used for the measurement of the
corruption (such as Corruption Perceptions Index - CPI) show that
the worst situation is in the post-communist countries
and Mediterranean countries.
The presented paper uses the Czech Republic as an example of a
post-communist country and analyses the factors which influence
the scope of corruption in public procurement. Moreover, the
paper discusses indicators that could point at the public procurement
market inefficiency. The presented results show that post-communist
states use the institute of public contracts significantly more than the
old member countries of the continental Europe. It has a very
important implication because it gives more space for corruption.
Furthermore, it appears that the inefficient functioning of public
procurement market is clearly manifested in the low number of bids,
low level of market transparency and an ineffective control
system. Some of the observed indicators are statistically significantly
correlated with the CPI.
Abstract: Limited competition has been a serious concern in infrastructure procurement. Importantly, however, there are normally a number of potential bidders initially showing interest in proposed projects. This paper focuses on tackling the question why these initially interested bidders fade out. An empirical problem is that no bids of fading-out firms are observable. They could decide not to enter the process at the beginning of the tendering or may be technically disqualified at any point in the selection process. The paper applies the double selection model to procurement data from road development projects in developing countries and shows that competition ends up restricted, because bidders are self-selective and auctioneers also tend to limit participation depending on the size of contracts.Limited competition would likely lead to high infrastructure procurement costs, threatening fiscal sustainability and economic growth.