While the ideal research design would incorporate all European Union (EU) member states; in this research, we limit the analysis to Bulgaria where we have a comprehensive and good quality dataset on public tenders as well as participating companies. Bulgaria can be considered as the least likely case for championing GPP, as the country is particularly challenged in achieving traditional procurement objectives such as competition, integrity, and efficiency (Fazekas et al., 2022). It is one of the poorest and highest corruption risk countries in the EU and is converging to the EU average only very slowly (World Bank, 2022).

The results show that GPP amounted to about 10%-20% of total public procurement spending in Bulgaria in 2011-2019. Most GPP descriptors and requirements are found in titles, technical requirements and product descriptions. Green criteria in award criteria texts, which are mainly used for flagging GPP in the literature, are marginal in comparison. This means that GPP is about what is bought rather than how it is bought; for example, buying electric cars, rather than buying cars by assigning extra scores for lower emissions. Overall, we find that GPP has a beneficial impact on key procurement objectives and the allocative efficiency of resources in the economy. GPP improves competition through encouraging new firm entry and hence lowering the market share of winning suppliers by 3-7 percentage points. Moreover, it also lowered the share of local winners by about 2 percentage points, pointing at a stronger nationwide marketplace. GPP contracts are associated with lower corruption risks, such as lower single bidding probability of 0.6-1.5 percentage points. Finally, GPP contracts are awarded to more productive firms. Among all firms obtaining public procurement contracts, GPP contracts are awarded to firms with 14% higher labor productivity. The productivity effect is even stronger among GPP contracts that have a low risk of corruption: 19% higher labor productivity and 6% higher total factor productivity. The results can either be driven by the more competitive procedures applied to green contracts or by more productive firms being able to better comply with the green criteria and technology requirements. In either case, GPP enhances the allocative efficiency of resources towards more productive firms in the economy.

Our contributions are fourfold. First, we firmly establish that green and sustainability considerations are largely present in what is procured rather than how the winning bidder is selected. Hence, GPP manifests itself largely in buying particular products (e.g., renewable electricity rather than electricity from fossil fuels) and establishing minimum requirements (e.g., organic certified food rather than any kind of food). Second, we show that comprehensively searching for GPP contracts in line with EU green public procurement guidelines yields a high portion of GPP in total public procurement spending (10%-20% annually), even in the EU country with the lowest GDP per capita, Bulgaria. Third, we establish that GPP presents an opportunity to foster competition, integrity and efficiency in public procurement _in addition to_ pursuing green and sustainable goals. Buying environmentally friendly products enables new companies to enter the public procurement market, which has the potential to break up “old boy” and potentially corrupt networks. Fourth, the positive relationship between green public procurement and more competitive procurement practices helps in channeling public resources to more productive firms, supporting the economy’s allocative efficiency and thus overall private sector productivity growth.

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