Discretion at the Margin: Threshold Manipulation and Electoral Bans in Colombian Public Procurement
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arXiv: 2610.28965v1 · Summary page
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Procurement rules leave fingerprints in the numbers
Colombian public buyers can use faster, less competitive procedures below legal contract-value thresholds. A study of procurement records finds sharp concentrations of estimated values just below those cutoffs, including roughly 49,600 excess processes below the small-purchase threshold. Crucially, the spikes follow each entity’s legal threshold as it changes with the minimum wage, rather than staying attached to convenient round numbers. Territorial governments led by elected officials bunch more than appointed national agencies, even after adjustments for several differences in their purchasing.
Near the tender threshold, processes just below the cutoff attract about half as many bidders as those just above, secure smaller discounts and are more often enlarged after award. Timing rules also prompt adaptation: direct contracting falls by 95% during the four-month pre-presidential-election ban but rises by 209% in the preceding two weeks. Related evidence from Chile strengthens the case that buyers respond to the rules themselves. The policy dilemma is clear: thresholds that simplify small purchases also create incentives to keep contracts on the less competitive side of the line.
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