Do Procurement Rules Impact Infrastructure Investment Efficiency? An Empirical Analysis of Inversao Das Fases in Sao Paulo State

33 Pages Posted: 20 Apr 2016

See all articles by Luis Blancas

Luis Blancas

affiliation not provided to SSRN

Laura Chioda

World Bank

Tito Cordella

World Bank

Alexandre Borges de Oliveira

affiliation not provided to SSRN

Felix Várdy

CESifo (Center for Economic Studies and Ifo Institute)

Date Written: January 1, 2011

Abstract

As a means to reduce delays in public works implementation, a number of Brazilian states have recently reformed their procurement rules allowing contractor price proposals to be assessed before the technical evaluation of submitted bids is undertaken (in a procedure known as inversao das fases). In order to evaluate the effects of such reform, this paper adopts a difference-in-differences methodology to compare the procurement performance of Sao Paulo state (a reformer state) and Minas Gerais'(a non-reformer state) largest water and sewage utility along three efficiency dimensions: (i) procurement process duration; (ii) likelihood of complaint resolution litigation; and (iii) prices paid to contractors. The analysis finds that the reform is associated with a 24 day reduction in the duration of procurement processes for large projects and a 7 percentage point drop in the likelihood of court challenges irrespective of project size. Although both effects are economically important, only the latter is statistical significant. Finally, the paper finds no evidence of an effect of the procurement reform on prices paid.

Keywords: Government Procurement, E-Business, Public Sector Corruption & Anticorruption Measures, Contract Law, Investment and Investment Climate

Suggested Citation

Blancas, Luis and Chioda, Laura and Cordella, Tito and Borges de Oliveira, Alexandre and Várdy, Felix, Do Procurement Rules Impact Infrastructure Investment Efficiency? An Empirical Analysis of Inversao Das Fases in Sao Paulo State (January 1, 2011). World Bank Policy Research Working Paper No. 5528, Available at SSRN: https://ssrn.com/abstract=1747431

Luis Blancas (Contact Author)

affiliation not provided to SSRN

Laura Chioda

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Tito Cordella

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States
202-473-0043 (Phone)

Alexandre Borges de Oliveira

affiliation not provided to SSRN

No Address Available

Felix Várdy

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

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