SITE investigates public procurement thresholds in Sweden
Researchers have found out that there is an indication of strategic bunching of Swedish tenders under the EU threshold and thresholds rules in public procurement affect the behaviour of procuring entities both in Sweden and internationally.
A recent FREE policy brief by Giancarlo Spagnolo, senior research fellow at SITE and professor of Economics at University of Rome II, and Elena Paltseva, research fellow at SITE, analyses the impact of procurement thresholds on strategic behavior of public buyers in Sweden.
In the policy brief authors summarize the results of their exploratory study of "Public Procurement Thresholds and Data in Sweden" drawn up by Roman Bobilev, Andrea Guglielmo, Elena Paltseva and Giancarlo Spagnolo and commissioned by Swedish Competition Authority. The report has documented signs of strategic bunching of public buyers at the EU thresholds. In other words, procurement thresholds affect not only the associated transaction costs, but also the strategic behaviour of procuring entities, a point overlooked in the current Swedish debate on public procurement. Media channels Publikt and Upphandling24 have also discussed the research results.
Policy Brief insights
The policy brief shows that there are signs of bunching, an anomalous concentration of procurements with values right below the regulatory thresholds.
In the policy brief authors provide illustrative histograms of tender values around the relevant thresholds, test for the presence of distribution discontinuity at the threshold and describe their results in detail. Read more about their research results and signs of bunching at the threshold in their policy brief "Public Procurement Thresholds in Sweden" here or read it on our SlideShare channel below.