Evaluating the Economic Effects of Canada's New Government Procurement Integrity Framework

10 Pages Posted: 25 Nov 2014 Last revised: 26 Nov 2014

Dan Ciuriak

Ciuriak Consulting Inc.; C.D. Howe Institute; Centre for International Governance Innovation (CIGI); BKP Development Research & Consulting GmbH

Date Written: November 12, 2014

Abstract

This note provides a preliminary evaluation of the economic effects of the Public Works and Government Services Canada Integrity Framework. It is preliminary in that the study draws on a limited range of data and does not benefit from a sufficient passage of time to evaluate the Government of Canada’s practice in applying the measures or the behavioral responses of firms or Canada’s trading partners. Based on first principles analysis, the option of debarment imposes a cost not only on the firms that are debarred, but also on many innocent parties, including society at large. The costs are greater the less substitutable the products of the debarred firm are for their competitors’ products. The reshuffling of markets triggered by debarment would generate additional “dead weight” costs equivalent to red tape (the nuisance administrative expenditures associated with re-contracting). As well, there would as a further set of knock-on impacts that cannot be quantified to compound the direct costs.

Keywords: government procurement, anti-corruption measures

JEL Classification: K42

Suggested Citation

Ciuriak, Dan, Evaluating the Economic Effects of Canada's New Government Procurement Integrity Framework (November 12, 2014). Available at SSRN: https://ssrn.com/abstract=2529802 or http://dx.doi.org/10.2139/ssrn.2529802

Dan Ciuriak (Contact Author)

Ciuriak Consulting Inc. ( email )

83 Stewart St.
Ottawa, Ontario K1N 6H9
Canada

C.D. Howe Institute ( email )

67 Yonge St., Suite 300
Toronto, Ontario M5E 1J8
Canada

Centre for International Governance Innovation (CIGI) ( email )

57 Erb Street West
Waterloo, Ontario N2L 6C2
Canada

BKP Development Research & Consulting GmbH ( email )

Romanstrasse 74
München, 80639
Germany

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