Purpose: This study aims to empirically evaluate the effectiveness of government auditing of local authorities' compliance with the procurement rules.
Design/methodology/approach: A diff-in-diff approach is used where the measure of compliance is (changes in) the incidence of private litigation under the Public Procurement Act, in audited vs non-audited municipalities. Further, semi-structured interviews were conducted with chief procurement officials.
Findings: No statistically significant effect is found. While strong effects of audits can be ruled out, the statistical results and the interviews do not, however, contradict a modest but long-lasting effect.
Originality/value: Few studies have addressed the effect of public procurement auditing on compliance. This study develops an empirical framework and presents empirical results.