Strategies to Foster Competition for the Market in the Urban Bus Sector in Developing Countries

Abstract

Different mechanisms have been adopted by developed and developing countries over the last decades to provide urban bus services. Although competitive tendering has been considered the standard method to procure urban bus services, it cannot be treated as a ready-made solution. Contracts are incomplete by nature and, after the tender, to avoid ex-post opportunism they must be properly monitored. Additionally, developing countries, in general, have weak regulatory bodies and limited capacity to oversee public contracts. This paper aims to review the literature to gather actions that can increase the competition in public tenders and improve service quality during the life of the contract in developing countries.