Public Procurement Integrity Perception Building
RCTReview
Small and medium enterprises in low- and middle-income countries often refrain from bidding on government supply tenders due to widespread perceptions of public sector corruption and non-transparent selection processes. This informational friction reduces market competition and deprives formal firms of lucrative state contracts.
Picture this
Imagine a local mechanic who refuses to apply for a town government vehicle maintenance contract because the mechanic believes the mayor only awards contracts to relatives. When an independent auditor presents clear evidence showing the bidding process is fair and transparent, the mechanic finally submits a bid and wins a government contract.
What the evidence says
Correcting misperceptions about public sector corruption significantly increased the frequency with which firms submitted bids for government tenders and increased the number of public contracts won by participating firms.
- Who was studied
- Small and medium enterprise owners in Uganda.
- How
- Randomized controlled field experiment evaluating public procurement participation following information interventions on institutional corruption.
What to do
Provide small and medium business owners with transparent performance data and objective information regarding public procurement auditing to dispel false corruption perceptions and increase tender participation.
From the source
"How well firms trust the government also matters: in Uganda, improving firms' perceptions about government corruption led firms to bid on and win more government tenders."
Market Access: Connecting Firms and Entrepreneurs to Markets to Spur Business and Job Growth