Improving Public Procurement: Field Experiments in Chile

This project has been canceled. Procurement is one of the largest categories of government expenditure, accounting for about 12% of GDP on average in OECD countries. While much attention has been paid to how contracts are awarded, a key understudied issue in procurement is the fact that contracts are often renegotiated ex-post, with comparatively little oversight. This project investigates the relative importance of the ex-ante vs. ex-post scrutiny of public performance. Through a randomized intervention designed jointly with the Chilean audit and public procurement authorities, official letters from the audit agency are sent to randomly chosen public entities in 2015 informing them they have been selected for a program that either a) involves audits of the ex-ante procurement phase of contracts or b) involves audits of the execution of procured contracts. Both treatment types, as well as and control entities, will be audited about a year later. This will allow us to examine how the anticipation of ex-ante and ex-post scrutiny changes the procurement process, as well as the execution of new and pre-existing contracts. This project represents a groundbreaking collaboration between academia and government institutions in charge of both procurement and auditing in Chile.