A study conducted by Raimundo Undurraga, a researcher at the Millennium Institute MIPP, in collaboration with scholars from the University of Chile, PUC Chile, and UC Berkeley, explores how monitoring buyer performance in public procurement systems can enhance spending efficiency.
Efficient public procurement is crucial for maximizing the value of government and organizational expenditures. However, the complexity of purchasing processes and the lack of proper incentives can lead to significant inefficiencies and resource waste. In many countries, the adoption of e-procurement systems has facilitated transaction monitoring and analysis, helping to identify areas for improvement and promote greater transparency and accountability.
Chile, through its electronic procurement system ChileCompra, has become a regional leader in modernizing public acquisitions. This system not only enables real-time purchase management but also provides a data-driven platform to assess buyer performance. Such data allows public procurement managers to evaluate and enhance the efficiency of their teams, fostering more responsible and effective resource management.
In this context, the study “How Managers Can Use Purchaser Performance Information to Improve Procurement Efficiency”, conducted by Raimundo Undurraga (University of Chile), Pablo A. Celhay (PUC Chile), Paul Gertler (UC Berkeley), and Marcelo Olivares (University of Chile), examines how buyer performance data can be leveraged by public procurement units in Chile to enhance purchasing efficiency.
Using automatically generated data from ChileCompra’s Mercado Público platform, the researchers implemented a field experiment to assess the impact of performance report dissemination on buyer behavior and procurement efficiency.
The performance reports were based on transactional data, analyzing prices paid, product attributes, and other key indicators to calculate excessive spending levels per buyer. These reports included visualizations and comparisons, enabling buyers and procurement managers to identify areas for improvement and make more informed decisions to optimize purchasing processes.
The randomized field experiment involved 184 public procurement units and more than 3,500 buyers. Participants were assigned to one of three experimental groups:
📌 Public Information Group: Both buyers and public service managers received individual performance reports. These reports contained detailed transaction analyses, benchmarking efficiency standards and comparing buyer performance.
📌 Private Information Group: Only buyers received individual performance reports, while managers received only aggregated information about the overall performance of their unit—without specific efficiency details at the buyer level.
📌 Control Group: Neither buyers nor managers received performance reports.
The study’s findings and the full research article are available here:
🔗 Public Spending Efficiency: Evaluating Buyer Performance in Public Administration
MIPP Chile 2025