Can Electronic Procurement Improve Infrastructure Provision? Evidence From Public Works in India and Indonesia / Sean Lewis-Faupel, Yusuf Neggers, Benjamin A. Olken, Rohini Pande.

Format:

Book

Author/Creator:

Lewis-Faupel, Sean.

Contributor:

National Bureau of Economic Research.

Neggers, Yusuf.

Olken, Benjamin A.

Pande, Rohini.

Series:

Working Paper Series (National Bureau of Economic Research) no. w20344.

NBER working paper series no. w20344

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2014.

Summary:

Poorly functioning, and often corrupt, public procurement procedures are widely faulted for the low quality of infrastructure provision in developing countries. Can electronic procurement (e-procurement), which reduces both the cost of acquiring tender information and personal interaction between bidders and procurement officials, ameliorate these problems? In this paper we develop a unique micro-dataset on public works procurement from two fast-growing economies, India and Indonesia, and use regional and time variation in the adoption of e-procurement across both countries to examine its impact. We find no evidence that e-procurement reduces prices paid by the government, but do find that it is associated with quality improvements. In India, where we observe an independent measure of construction quality, e-procurement improves the average road quality, and in Indonesia, e-procurement reduces delays in completion of public works projects. Bidding data suggests that an important channel of influence is selection -- regions with e-procurement have a broader distribution of winners, with (better) winning bidders more likely to come from outside the region where the work takes place. On net, the results suggest that e-procurement facilitates entry from higher quality contractors.

Notes:

Print version record

July 2014.