This experimental study aims to identify and characterize the role of information frictions in public procurement, considered a primary barrier to private sector development. It ultimately aims to estimate how to improve the effectiveness of public procurement in serving firm growth and resource reallocation. This study will use a sample of firms active across Uganda, and a sample of public officials working at randomly selected procurement and disposal entities (PDEs).
Researchers: Dr Emanuele Colonnelli; Francesco Loiacono; Dr Edoardo Teso; and Esau Tugume
Partners: Chicago Booth School of Business, International Growth Centre (IGC); and Private Enterprise Development in Low-Income Countries (PEDL)
Timeline: 2019–2022
Status: Ongoing
Contact: Esau Tugume
tugume.esau@brac.net
Context
The idea behind the project stems from the first-order policy interest in the role of public procurement for private sector development in low-income countries. It aims to study and address key barriers to efficient public procurement, focusing on information frictions. Firms that are potentially interested in doing business with the government often lack adequate information about the complicated and burdensome procurement procedures and regulations, and they also face major barriers to access information on available tenders and opportunities. The broad objective of this research is to provide the first comprehensive understanding of the market for government contracts in low-income countries, with an emphasis on understanding what are the main challenges to the participation of firms in the procurement process and to the competitiveness and efficiency of public procurement.
Research Questions
Methodology
Research Leg 1: A firm experiment will use a randomized control trial (RCT) design. There are two treatment arms: (i) 1,000 firms receiving information on public procurement opportunities, and (ii) besides receiving information, another 1,000 firms also receive financial incentives to purchase bidding documents. Another 2,000 firms will be in the control arm, without receiving any intervention.
Research Leg 2: Procurement and disposal entities (PDEs) experiment will also use an RCT design. A total of 260 PDEs will be randomized into either the treatment arm which will receive information about suitable providers in the form of a booklet, organized by type of activity and region, or the control arm which will receive no intervention.
Research Leg 3: Lab-in-the-field experiment using an RCT design will draw an additional 1,000 firms from the same pool of firms that were used for research Leg 1, but that were not included in research Leg 2. This leg aims to understand the perception that firms have of public entities.
Findings
Study ongoing.
