This article asks if low political competition is associated with more restricted public procurement processes. Using unique Swedish municipal data from 2009 to 2015, it demonstrates that when one party dominates local politics, noncompetitive outcomes from public procurement processes are more common. What is most striking is that the risk of receiving only one bid, on what is intended to be an open and competitive tender, considerably increases with long-standing one-party rule. The article contributes to a significant body of work on the detrimental effects of low political competition, and the results are particularly interesting from a comparative perspective because Sweden—an old democracy with a meritocratic bureaucracy, characterized by low levels of corruption and clientelism—is a highly unlikely case in which to find such tendencies.
The link is here. (HT: Tyler).
One observation is that one-party rule on the buyer side (a monopsony) tends to produce its mirror image on the supplier side (a monopoly). Consider what followed from the big industrial era plants, some of which were in effect the sole buyer of wage labor in a town. From this situation labor unions were created, the sole supplier of wage labor.
Another observation is that the solicitations for most public procurement contracts have usually been “shaped” by one firm or another. Usually, if a firm wasn’t in on the ground floor, then it wouldn’t want to bear the expense of submitting a proposal. So single bids on an openly advertised contract may signal a highly competitive pre-contract process for the contractors.
competitive pre-contract process for the contractors its my favorite blog post. Thanks for sharing.