This paper examines whether electronic procurement (e-procurement), which increases access to information and reduces personal interactions with potentially corrupt officials, improves procurement outcomes. We develop unique datasets from India and Indonesia and use variation in adoption of e-procurement within both countries. We find no evidence of reduced prices but do find that e-procurement leads to quality improvements. In India, where we observe quality directly, e-procurement improves road quality, and in Indonesia, e-procurement reduces delays. Regions with e-procurement are more likely to have winners come from outside the region. On net, the results suggest that e-procurement facilitates entry from higher quality contractors.
Lewis-Faupel, Sean, Yusuf Neggers, Benjamin A. Olken, and Rohini Pande.
"Can Electronic Procurement Improve Infrastructure Provision? Evidence from Public Works in India and Indonesia."
American Economic Journal: Economic Policy,
Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behavior
National Government Expenditures and Related Policies: Infrastructures; Other Public Investment and Capital Stock
National Government Expenditures and Related Policies: Procurement
Monopoly; Monopolization Strategies
Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
Transportation Economics: Government and Private Investment Analysis; Road Maintenance, Transportation Planning