How competitive is competitive bidding? The case of the single regeneration budget program

Abstract

Governments think they can improve policies and get better value for money by asking organizations to bid for programs or funds rather than allocating them according to objective measures of need. This article seeks to evaluate this form of competitive bidding by exploring whether competition improved bid quality in England's Single Regeneration Budget program. After reviewing the main theoretical accounts, we argue that competition only exists at the margins where groups that would not otherwise get funded may move away from the sort of project they most wanted. Groups that wanted to carry out projects that the government finds valuable anyway will generally not have to compete with each other, and many other groups could have put in lower-quality bids to get the benefits of participation in the process. Using data from four years of the program, we show that there were some gains but that they were not great.