Private enforcement of procurement rules: The heterogeneous effect of the EU remedies directive
International Review of Law and Economics, à paraître, 2026 — Eshien Chong, Michael Klien et Stéphane Saussier
Abstract
This study examines the impact of the EU Remedies Directive on the prevalence of direct awards in public procurement. Strengthening bid protest mechanisms should, in theory, curb the use of direct awards by increasing the likelihood that aggrieved bidders challenge such decisions. Using a difference-in-differences approach, exploiting the staggered implementation of the directive across EU countries, we test this hypothesis using a large database of public procurement contracts. We find a strong deterrent effect for public buyers with a high initial propensity to use direct awards. For this group, the directive led to a reduction in direct awards exceeding 50 percentage points within two years of implementation. These results highlight the effectiveness of private enforcement mechanisms in shaping procurement behaviour, yet indicate that such measures may also discourage the justified use of direct awards.