Favouritism and Inefficiency in Procurement: Evidence from Public Works in Italy

Rivista di Politica Economica, April/June, 2013, pp. 161 - 190

19 Pages Posted: 14 Nov 2019

See all articles by Francesco Decarolis

Francesco Decarolis

Bocconi University - Department of Economics

Cristina Giorgiantonio

Bank of Italy

Date Written: 2013

Abstract

This paper shows how favoritism in public procurement can emerge despite the use of rigid procedures for awarding contracts and of transparent criteria for allowing firms to bid.

The paper analyzes data on the awarding of public works in Italy to illustrate how differences in fine regulation details across Italian local administrations have major implication in terms of favoritism toward local contractors and the overall efficiency of the procurement process. The findings are a cautionary tale about the benefits and risks of a decentralized procurement regulation and a warning about the problems facing green and innovation procurement.

Keywords: infrastructure, auctions, regulation

JEL Classification: K23, L51, L90

Suggested Citation

Decarolis, Francesco and Giorgiantonio, Cristina, Favouritism and Inefficiency in Procurement: Evidence from Public Works in Italy (2013). Rivista di Politica Economica, April/June, 2013, pp. 161 - 190, Available at SSRN: https://ssrn.com/abstract=3476534 or http://dx.doi.org/10.2139/ssrn.3476534

Francesco Decarolis (Contact Author)

Bocconi University - Department of Economics ( email )

Via Gobbi 5
Milan, 20136
Italy

Cristina Giorgiantonio

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

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