Complexity meets flexibility: unintended differentiation in EU public procurement

• Published in: Journal of European public policy 2024, p.1-27
• Main Authors: Loxbo, Karl, Pircher, Brigitte
• Format: Article
• Language: English
• Subjects: corruption; differentiated policy implementation; European Union; implementation flexibility; Political Science; public procurement; rule complexity; Statsvetenskap
• ISSN: 1350-1763; 1466-4429; 1466-4429
• DOI: 10.1080/13501763.2024.2427196

The expansion of European Union (EU) regulations often hampers effective policy implementation in the member states. However, little is known about how these diverse states navigate and apply the complex rules in practice, and with what consequences. This study addresses this gap by examining how the 2014 EU public procurement directives impacted procurement practices across the Union. Using a difference-in-difference design, we find that the EU's goals of harmonisation and competition were undermined in practice. First, we observe a rise in single-bid contracts across EU countries compared to non-EU countries, undermining competition. Second, we demonstrate a growing divergence in policy implementation, where member states with varying administrative capacities and corruption risks display different rates of single bids. Third, we show that while a few Eastern European countries with poor procurement records embraced the flexibility to award contracts based on the most economically advantageous tender, Nordic countries largely avoided this flexibility. This divergence raises concerns that the new EU rules have brought about new corruption risks. These findings have important implications, underscoring the unintended consequences of expanding complex and flexible regulations, revealing that efforts to harmonise the internal market can backfire, leading to increased differentiated policy implementation across the member states.