Working Papers:

The Effects of Public Procurement on Medicine Supply 

Pharmaceutical markets in many middle-income countries have large public and private sectors that coexist. The same set of firms often serves both sectors, creating dependencies in the firms' supply decisions across sectors. Using a novel dataset from Ecuador, I provide evidence that firms' pricing decisions in the public and private sectors respond to cross-sector incentives. To study the forces behind firms' behavior, I develop and estimate a model in which firms compete in auctions in the public sector and in prices in the private market. I use the model to quantify the effects of the auction design and environment on outcomes in both sectors.  I analyze the effect of increasing the number of participants in the auction, changing the reserve prices, and introducing local-preference rules in the auction.

Publications: 

Political Connections and Misallocation of Procurement Contracts: Evidence from Ecuador, with Felipe Brugués and Samuele Giambra, Accepted at Journal of Development Economics

We use new administrative data from Ecuador to study the welfare effects of the misallocation of procurement contracts caused by political connections. We show that firms that form links with the bureaucracy through their shareholders experience an increased probability of being awarded a government contract. We develop a novel sufficient statistic – the average gap in revenue productivity and capital share of revenue – to measure the efficiency effects, in terms of input utilization, of political connections. Our framework allows for heterogeneity in quality, productivity, and non-constant marginal costs. We estimate political connections create welfare losses between 2 to 6% of the procurement budget