Since the beginning of 2006, bidding behavior on government construction contracts has changed from being coordination-based to being competition-based. We analyze bid data from the general public engineering works of the Shikoku Regional Development Bureau of the Ministry of Land, Infrastructure, Transport, and Tourism for the financial years from 2002 to 2011 to identify this change. The Get-Out-Dango declaration, designed to prevent bid rigging, was the main cause of the change. We support this proposition with three points of evidence: First, high-ranking public procurement involving the major players changed from coordination-based pricing to competition-based pricing. The rank order also changed, from high rank to low rank, but this order has since reversed. Second, other policy changes have had less of an impact on pricing. Finally, this behavior change had a larger effect than that of the introduction of a general competitive bidding system.
View full abstract