Government Intervention and Macroeconomy: Microevidence on Transmission of Government Procurement (fromMicroGtoY) is the title of the project to be led by Manuel García-Santana, a professor of the UPF Department of Economics and Business on sabbatical leave and currently a member of the World Bank Development Research Group. He will be able to develop his project over five years, thanks to a European Research Council (ERC) Consolidator Grant endowed with 1,464,000 euros, pertaining to the 2023 call (ERC COG 2023). 

With this scholarship, the University has already obtained five grants under this prestigious research grant programme.

In the fromMicroGtoY project, the researcher will collect data (amount, awarding institution, etc.) on millions of public contracts awarded in many countries and merge this information with data from company balance sheets and business-to-business transactions. The newness of the data and the complex interactions between the outcomes of public procurement, economic distortions and company decisions put this project at the cutting edge of research.

“My proposal aims to investigate the concrete economic channels whereby the outcomes of public procurement become permeable to the rest of the economy, and to identify the sources of inefficiencies in this process”

This process will allow Manuel García-Santana to study the mechanisms of transmission of public procurement (taking into account that, depending on the country and the year in question, governments spend between 10 and 20% of their GDP on public procurement) to the aggregate economy. “My proposal aims to investigate the concrete economic channels whereby the outcomes of public procurement become permeable to the rest of the economy, and to identify the sources of inefficiencies in this process”, he asserts.

Answers to three crucial questions concerning public procurement

The project is divided into three blocks, which seek to answer crucial questions about the role played by public procurement in determining macroeconomic outcomes. First, to what extent is “domestic bias” costly? (that is, the fact that governments buy more, disproportionately and unpredictably, from local companies). Secondly, what are the effects on company dynamics of corruption in public procurement? And lastly, what factors determine the aggregate price at which governments buy goods and services and what are the implications for consumer welfare?

Expert in macroeconomics, trade and growth and development

Manuel García-Santana, a PhD in Economics from the Center for Monetary and Financial Studies, CEMFI (2012), has been a senior economist at the World Bank (Macroeconomics and Growth team at the Research Department) since July 2022. In 2015 he joined the UPF Department of Economics and Business (tenure track professor), with links to the Barcelona School of Economics (affiliated professor) and the Research Centre for International Economics, CREI (as an associate researcher). Since 2021, he has been on leave from these centres.

An expert in macroeconomics, trade, growth and development, Manuel García-Santana won the Young Economist Award 2015, granted by the scientific committee of the Jornades d’Economia Industrial (JEI) industrial economics symposium and in 2020, the Hicks-Tinbergen medal, awarded by the European Economic Association, along with professors Jose Asturias and Roberto Ramos. That same year he received a grant from the Ramón Areces Foundation to study the low participation in public procurement among European countries. In the field of publishing, he is associate editor of Journal of International Economics and of Journal of the Spanish Economic Association (SERIEs).