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Dr Mihaly Fazekas, University of Cambridge

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In a joint seminar NICEP and the Public Procurement Research Group welcome Dr Mihaly Fazekas (University of Cambridge and Hertie School of Governance) to present Big Data in law and economics? Insights from a large-scale research project on government spending across Europe.

The talk is divided into two parts, the first provides an overview of the ongoing EU funded large-scale research project DIGIWHIST. It collects transaction-level public procurement data in 35 European countries and develops objective proxies for corruption, transparency, and administrative capacity to support research and government accountability. Indicators characterise public tenders, bidding firms, public buyers, as well as individuals in leadership positions. As the underlying datasets are very diverse capturing purchasing activities by all levels of government and also state owned enterprises, and they are also wide in geographical scope, the research implications are widespread opening new research avenues combining law, economics, and political science.

The second part, using novel data and indicators from a Europe-wide public procurement dataset for 2009-2014, investigates whether the European Commission and its judicial arm, the Court of Justice of the European Union are effective in safeguarding the single market in government contracts by changing market behaviour rather than merely instigating legal change. We look at two distinct causal mechanisms: i) requiring a change in national public procurement legislation; and ii) striking down anticompetitive practices while leaving legislation unchanged. Theoretically, it is unclear whether any of these interventions would result in a lasting improvement in competitive outcomes such as the number of bidders, supplier composition, and discounts offered, as well as in public sector tender design such as procedure types or open advertisement.

Using matched samples difference-in-differences estimation, we find that requiring legislative change has a significant and sizeable positive impact on market openness: it increases the number of bidders (1.8-3%), lowers the incidence of single bidding (3-4%), decreases the market share of local winners (3-4%), and lowers prices (0.4-0.6%). Requiring change in anticompetitive practices has no discernible impact. The policy implications are profound, in order to improve the EU-wide single market of government purchases, better monitoring and stronger supranational legal action are needed.

Date(s) - 05 Feb 2018
1:00 pm - 2:30 pm

B55 Law and Social Sciences