Tender competitiveness and project performance in India’s PMGSY scheme

Abstract

The study builds upon previous research showing that politicians in India allocate more roads to contractors sharing their surnames, and that political intervention leads to poorer road quality, higher costs, and a higher probability that the roads are not built in practice. This research looks into the mechanisms of this political influence by analysing whether contractors without political connections are deterred from applying, or whether the evaluation process is biased in favour of those with connections. The researchers exploit political shocks, such as a politician winning an election, to identify how politicians manipulate the road bidding process. Any relationships between these variables are indicative of collusive behaviour. Knowing at what stage of the tendering process connected contractors receive undue favours will help to improve tender rules to prevent corruption and formulate more efficient anti-corruption policy recommendations. This work is part of the International Growth Centre’s ‘Bidding for Roads (top-up proposal)’ project