Supplier Concentration in Decentralized Procurement: Evidence From a Low-Institutional-Capacity Context

Abstract

This study analyzes supplier concentration in subnational public procurement in Peru between 2015 and 2025, highlighting its implications for competition, institutional integrity, and spending efficiency. Using a longitudinal quantitative design and administrative data from over 1.7 million transactions in SEACE, the research applies multiple concentration measures, including the Herfindahl–Hirschman Index, Gini coefficient, entropy index, and concentration ratios. The analysis considers both contract value and frequency. Results show an overall trend toward deconcentration, though with significant differences by contract size. The number of active suppliers emerges as the strongest predictor of concentration. However, in large contracts, the deconcentration trend disappears once local market conditions are controlled for. Additionally, the low retention rate of major suppliers over government terms suggests political and institutional influences in the allocation of high-value contracts. The study proposes a two-dimensional analytical framework and a policy-oriented typology applicable to other decentralized systems.