Public procurement is a large component of public spending, encompassing 10-15% of GDP in industrialized countries. As most contracts are awarded under highly regulated procedures, the institutional framework strongly affects not only taxpayers but also competition and consumers. In this task, we study several consumer-relevant aspects of public procurement.
First, by using Green Public Procurement (GPP), where the environmental quality of bids is taken into account when awarding public contracts, governments can leverage their purchasing decisions to pursue environmental objectives with wide implications for consumers. We provide an assessment of the main barriers to GPP and designing policy solutions to overcome them.
Second, we analyze the role of screening and preferential policies in procurement. Specifically, we use detailed data on appeals, construction projects, and bids coupled with a structural econometric model to estimate the dynamic effects of screening.
Finally, we contribute to the theoretical literature on procurement by studying a setting with a budget-constrained mechanism designer and to the experimental literature by testing for the presence of anchoring effects in dynamic auctions.