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Learning by doing for public procurement

Author

Listed:
  • Aneesha Chitgupi

    (xKDR Forum)

  • Susan Thomas

    (xKDR Forum)

Abstract

A central choice in public administration is whether to 'make', which is production within the public sector, or 'buy', which is public procurement. While 'buy' has the advantage of harnessing the energy of private firms, it requires state capacity in contracting and leads to questions on how to obtain state capacity in contracting. One measure of state capacity in procurement is the extent of failure to spend resources budgeted for procurement. We construct a novel dataset about spending gaps (between what is budgeted and what is spent) in procurement by the Indian union government. We find that the spending gaps are the smallest when buying goods, and the highest with works. We find that ministries that have a sustained engagement with procurement fare better on obtaining minimum gaps in procurement spending, which suggests a process of learning by doing.

Suggested Citation

  • Aneesha Chitgupi & Susan Thomas, 2023. "Learning by doing for public procurement," Working Papers 22, xKDR.
    • Handle: RePEc:anf:wpaper:22
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    File URL: https://papers.xkdr.org/papers/ChitgupiThomas2023_LearningbydoingforPublicProcurement.pdf
    File Function: First version, 2023
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    Cited by:

    1. R. A. Mashelkar & Ajay Shah & Susan Thomas, 2024. "Rethinking innovation policy in India: Amplifying spillovers through contracting-out," Working Papers 32, xKDR.

    More about this item

    JEL classification:

    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out

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