Compliance and Strategic Contract Manipulation Around Single Market Regulatory Thresholds – The Case of Poland

GTI-WP/2017:01, Budapest: Government Transparency Institute

27 Pages Posted: 24 Jan 2018

See all articles by Bence Tóth

Bence Tóth

University of Cambridge - Department of Sociology

Mihaly Fazekas

Central European University (CEU); University of Cambridge - Faculty of Human, Social, and Political Science

Date Written: August 28, 2017

Abstract

The functioning of the EU’s single market in government contracts crucially hinges upon compliance with and adequate use of EU-wide rules. However, evidence from a range of countries suggest that these rules are circumvented and manipulated tenders are used to pursue protectionist or favouritistic agendas. In order to test whether such claims also apply to Polish public procurement we investigate the extent of non-compliance and manipulation around the regulatory thresholds defining whether national or EU-rules apply. In addition, we also explore the potential reasons behind observed strategic manipulations. We find that there is a non-negligible amount of potential non-compliance, that is sheer ignorance of the rules, amounting to up to 0.4% of tenders; and there is also strategic contract value manipulation just below EU thresholds. Such malpractices are likely due to both favouritistic and bureaucratic effort minimisation motifs potentially decreasing competitiveness and value for money. EU regulations are associated with better outcomes such as 5-22% higher bidder number.

Keywords: single market, EU, public procurement, regulation

JEL Classification: H57, F13, F14, F15

Suggested Citation

Tóth, Bence and Fazekas, Mihaly, Compliance and Strategic Contract Manipulation Around Single Market Regulatory Thresholds – The Case of Poland (August 28, 2017). GTI-WP/2017:01, Budapest: Government Transparency Institute, Available at SSRN: https://ssrn.com/abstract=3103407 or http://dx.doi.org/10.2139/ssrn.3103407

Bence Tóth

University of Cambridge - Department of Sociology ( email )

Free School Lane
Cambridge, CB2 3RQ
United Kingdom

Mihaly Fazekas (Contact Author)

Central European University (CEU) ( email )

Nador utca 9
Budapest, H-1051
Hungary

University of Cambridge - Faculty of Human, Social, and Political Science ( email )

Cambridge, CB3 9DD
United Kingdom

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