Inter-Municipal Cooperation in Public Procurement

Abstract

This paper assesses the effects of intermunicipal cooperation on public procurement (PP) performance, based on the Italian experience. We estimate a fixed effect regression model using a sample of 50,905 Italian public works contracts awarded both by municipalities and by municipal unions (MU) from 2012 to 2021. Results prove MU are more efficient than single municipalities at the execution, rather than the winning stage, of the tender. Public tenders awarded by MU show lower winning rebates, shorter delivery delays and, for less complex works, lower final execution extra costs. Furthermore, we investigate whether intergovernmental transfers may enhance PP performance.

Keywords: Public procurement, centralization, local cooperation

JEL Classification: C13, H57, H77