Municipal Administrative Capacity and Public Procurement: Evidence from Brazil

This working paper examines whether observable differences in municipal administrative capacity are systematically associated with public procurement outcomes in Brazil, and whether the procurement measure is also related to an independent public-service outcome. The study constructs a municipality-level dataset linking the 2024 Brazilian Survey of Basic Municipal Information (MUNIC), 2025 records from the National Public Procurement Portal (PNCP), and the 2025 Basic Education Development Index (IDEB). Administrative capacity is measured through three dimensions—bureaucratic personnel stability, digital administrative capacity, and governance and internal-control capacity—which are combined into a standardized Administrative Capacity Index (ACI). The main procurement sample contains 3,877 municipalities with at least 20 qualifying procurement procedures published by September 30, 2025, with 3,855 municipalities entering the principal regression sample. The preferred specification finds that a one-standard-deviation higher ACI is associated with approximately 2.1 percentage points higher recorded procurement award rate. The analysis is observational and does not identify a causal effect or mechanism. The paper explicitly treats the procurement measure as a recorded procurement outcome rather than a comprehensive measure of procurement efficiency, since differences in reporting completeness may contribute to the observed variation. Educational-outcome analyses using 2023 and 2025 IDEB provide a secondary assessment of the relationship between administrative capacity, procurement, and public-service performance. Replication materials are provided in the accompanying replication package. The package contains the data-processing and analytical materials necessary to reproduce the empirical results reported in the paper.