Bureaucratic Competence and Procurement Outcomes

Abstract

To what extent does a more competent public bureaucracy contribute to better eco- nomic outcomes? We address this question in the context of the US federal procurement of services and works, by combining contract-level data on procurement performance and bureau-level data on competence and workforce characteristics. We use the death occurrences of specific types of employees as instruments and find that an increase in bureau competence causes a significant and economically important reduction in: i) time delays, ii) cost overruns, and iii) number of renegotiations. Cooperation within the office appears to be a key driver of the findings.

Keywords: Buyer quality, competence, procurement, public management, state capacity

JEL Classification: D44, H11, H57