PhD defence: Efficiency and Effectiveness of Public Procurement Markets

On Friday 25 September 2026 at 2 pm., Marly Tatiana Celis Galvez will defend her PhD thesis Essays on Empirical Economics of Public Procurement: Drivers of Efficiency and Effectiveness.

In her dissertation Marly Tatiana Celis Galvez studies the drivers that shape the efficiency and effectiveness of public procurement markets. Using empirical methods from economics, she analyzes how institutions, public buyers, and firms shape procurement outcomes. It shows that three factors are particularly important:
 

• Reforms that restrict discretion in procurement can reduce price inefficiencies, but political favoritism weakens these gains. 
  
  Public procurement markets usually have established reference values (thresholds) that determine which regulations apply to each contract. Public buyers face incentives to adjust the value of contracts to avoid exceeding regulated thresholds. Below the thresholds, public buyers have more autonomy in the procurement process. 
  This research finds evidence that these modified contracts tend to be allocated to companies with ties to political parties. Therefore, improving efficiency in procurement markets requires better rules, such as well-designed thresholds, but also safeguards that reduce room for favoritism.
   
• Individual procurement officers matter: their skills, backgrounds, and preferences are associated with meaningful differences in project quality. 
  
  Using a novel measure of project quality based on costs of repairs of construction projects, Celis Galvez and coauthors find that public officials play an important role in achieving good quality. This means that improving procurement efficiency and effectiveness is not only about changing rules, but also about strengthening the capacity of public officials who design and award procurement contracts.
   
• Efficiency is not only about choosing the cheapest supplier but also which firms compete and enter the market. 
  
  For firms, winning a first public procurement contract can be an important financial opportunity. Firms entering the market acquire more assets, in other words, they expand their capacity. These gains are strongest for firms that remain actively supplying to the government. Sustained gains may arise because these firms learn and build experience. Short term entrants do not gain the same benefits, mainly because they bid with prices that are too low to support lasting growth, or because they lack information.

Balance between rules and discretion

The main conclusion is that the efficiency and effectiveness of public procurement markets cannot be improved by rules alone. Discretion can be useful, but only when combined with competent procurement officers, transparency, and safeguards against favoritism. Effective procurement policy should therefore balance rules and discretion, for example by determining regulatory thresholds while in parallel assessing risks of political favoritism; invest in professional training and selection of procurement officials, and improve informational channels  for new firms to participate in competitive procurement markets.

Marly Tatiana Celis Galvez is a PhD student at the Utrecht University School of Economics (U.S.E.).

Streaming video

You can follow this PhD defence via streaming video: